Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

PRIVATE BUSINESS

NOTTINGHAMSHIRE COUNTY COUNCIL (SUPERANNUATION) BILL [Lords]

Read a Second time and committed.

Oral Answers to Questions — SCOTLAND

Teachers (Pay)

Mr. Strang: asked the Secretary of State for Scotland whether he has any plans to meet representatives of the Educational Institute of Scotland to discuss the teachers' campaign for an independent pay review; and if he will make a statement.

The Secretary of State for Scotland (Mr. George Younger): No such meeting is at present arranged, but I am always prepared to consider requests by the Educational Institute of Scotland for meetings on matters of mutual concern.
I regret very much that, although the employers and two of the other teachers' unions would have been prepared to agree to my proposal that the Scottish joint negotiating committee should carry out a review of pay and conditions of service together, the EIS has maintained its demand for an independent review of pay alone. The sooner the EIS ceases its damaging strike action and returns to the negotiating table, the better it will be for Scottish education.

Mr. Strang: When will the Secretary of State attach to Scotland's teachers the same priority as he has to our hard-pressed ratepayers? Does he recognise that the decision of the EIS to suspend the targeting of Minister's constituencies means that the Government have three weeks before the EIS delegate meeting to come forward with a new initiative? Does he accept that the answer he gave is wholly unacceptable, and that if he continues in that vein the meeting on 7 June is bound to vote for more militant action?

Mr. Younger: The hon. Gentleman will be as aware as all hon. Members on both sides of the House that as long ago as December I recognised the strength of the teachers' feelings on these matters and offered to consider a package of pay and conditions and to make a contribution towards implementing it. The EIS has made no positive response to that, although the other unions are prepared to meet. I

believe that that answers the first part of the hon. Gentleman's question. I believe it is generally agreed that targeting has been a most unfortunate development. In the targeted areas it has harmed the opinion that people have of teachers. With regard to time, as the hon. Gentleman will be aware, I have all along been encouraging the teachers to discuss these matters. There is no reason why they should not do so.

Mr. Henderson: Will my right hon. Friend take the opportunity today to appeal once again to the EIS to explore the opportunities that he has offered for fruitful discussion and review through the joint negotiating committee? Does he agree that that would be a more fruitful way of going forward than the campaign on which it is waxing strong and which is often misleading? For example, one EIS representative said that the Parliamentary Under-Secretary of State for Scotland, my hon. Friend the Member for Eastwood (Mr. Stewart), would not know the inside of a Scottish school if he saw one, although he had recently visited Bell Baxter school in his official capacity. He was a pupil there and no doubt saw his name on the dux board.

Mr. Younger: Yes, Mr. Speaker, I am grateful to my hon. Friend. I know what nonsense such a remark is about my hon. Friend the Under-Secretary. As to making an appeal to the EIS, may I again stress that at no point during the long dispute have I denied that the teachers feel strongly about it? What is depressing is that they have not been prepared even to discuss pay and conditions. I hope that they will reconsider their position on that.

Mr. Bruce: Does the Secretary of State recognise, from parents' meetings around the country, that there is considerable anxiety about the prolonged nature of the strike and the dispute, and the need for it to be resolved? Parents do not feel that the Government have responded positively enough. Taking up the question by the hon. Member for Edinburgh, East (Mr. Strang), when will the Secretary of State recognise that Scottish education will receive the priority that it needs only when he is prepared to find new money for it in the way that he has been able to find new money for other things which he clearly believes have higher priority?

Mr. Younger: I agree with the hon. Gentleman that parents are most anxious about the position. Although I do not believe that he has been involved, I can tell him that the parents in those areas that were targeted feel bitter about the way in which they were singled out for action in this matter. As regards the hon. Gentleman's suggestion about finance, I must again repeat that since as long ago as December I have been offering to try to find some money, but I have had no response from the EIS.

Lord James Douglas-Hamilton: Will my right hon. Friend stress that he is absolutely ready and willing to negotiate in an effort to break the deadlock.

Mr. Younger: I appreciate my hon. Friend's point, but it is really not up to me to negotiate in this matter. The negotiating takes place in the joint negotiating committee between the employers, who are the education authorities, and the representatives of the teachers' unions. Usually the Secretary of State plays no part in such negotiating, apart from having two observers present. However, in this instance I said that I would look at a package of pay and


conditions and endeavour to help in implementing it. So much time has passed since I made that offer that it will become increasingly difficult to meet it, but it is still there.

Mr. Douglas: Does the Secretary of State appreciate that the teachers have reached a crisis position and that they are adamant about pursuing a review by an independent body?

Mrs. McCurely: The professional association is for negotiation.

Mr. Douglas: Well, the vast majority of them take that view, and we are talking about the vast majority. Will the right hon. Gentleman accept that this cat-and-mouse attitude of his will not do and that a crisis has been reached in Scottish education which only an independent review body can resolve? Will he concede that that should be done before the 1985–86 session commences?

Mr. Younger: I agree with the hon. Gentleman that this is a very serious matter indeed for Scottish education. I can sum up the respective positions briefly by saying that while the hon. Gentleman is right to say that the EIS has been adamant, I have not been adamant. Everyone can see who is trying to resolve the dispute and who is trying to be selfish.

Mr. Bill Walker: Does my right hon. Friend agree that while, obviously, some Scottish teachers merit greater rewards for what they do, the days when across-the-board agreements could be reached disappeared when the Labour Government went to the IMF? Does he further agree that to get the rewards for those who deserve them, it is essential that conditions as well as other matters are looked at; in other words, that it is impossible to look at pay in isolation?

Mr. Younger: I agree with my hon. Friend that it is unrealistic in any profession or employment to look at pay completely unrelated to conditions of service. That will have to be tackled as one subject, or as two subjects both applying to this problem. Until that happens, it will be impossible to have a realistic discussion.

Mr. Buchan: Did the right hon. Gentleman hear one of his hon. Friends say, "Not enough" when my hon. Friend the Member for Dunfermline, West (Mr. Douglas) referred to the vast majority of Scottish teachers approving of this action? May we be told what would be enough on the part of the teachers to persuade the right hon. Gentleman to change his mind, considering that the EIS represents 80 per cent. of Scottish teachers? Will he stop trying to pretend that they are an isolated group? They represent the vast majority of teachers and, I believe, the vast majority of parents, too.

Mr. Younger: It is true that the EIS represents the vast majority of teachers, and I have never suggested otherwise. It is significant, however, that the other unions are at least prepared to enter into discussions on the matter. It is very sad indeed that the largest union should not be prepared at least to try to resolve the dispute.

Mr. Wilson: Is the Secretary of State aware that there is disbelief among the EIS about the Government's willingness to give sufficient priority to the educational system in Scotland and to find the money necessary to answer the claim, and that that feeling is rooted particularly in his refusal of an independent pay inquiry? Will he give an undertaking here and now to find new

money to prime the pump so that these negotiations can be started? Is he aware that, without doing that, he will be in great difficulty?

Mr. Younger: Any teachers who are not convinced that the Government place a high enough priority on education have no reason to take such a view, considering that we are providing more per pupil both in primary and secondary schools than has ever been provided before. That answers completely that suspicion. The answer to the rest of the hon. Gentleman's supplementary question is that since last December I have been offering to help. The trouble is that nobody has taken it up.

Mr. Ewing: Despite the insults hurled at the teachers by the Secretary of State and by the Minister responsible for education and industry at the Scottish Office, does the right hon. Gentleman agree that the teachers have shown a fair degree of good will in ensuring that the 0 and H-level examinations proceed smoothly? Will the Secretary of State show similar good will and give an assurance that it is no part of his tactics to allow the dispute to run on into the summer holidays and create discontent when the new term starts? Will he consider a fresh initiative to get talks going to solve this very damaging dispute?

Mr. Younger: I have never uttered any insults to teachers or, so far as I am aware, to anyone else. As for the examinations, I am very grateful to the EIS teachers for changing their deeply unpopular proposal to disrupt the examinations, which I understand are now proceeding reasonably normally. I certainly do not agree that parents would take a happy view of what has occurred, because they feel very bitter about the way in which their children have been targeted. As for showing understanding, any reasonable person considering the two parties to the dispute would agree that I have shown understanding throughout and that the other teachers' unions have also shown flexibility, but there has been no sign of that from the biggest union, which is a great shame.

Western Isles

Mr. Donald Stewart: asked the Secretary of State for Scotland if he intends to make representations to the EEC for an extension of the integrated development programme in the Western Isles.

The Parliamentary Under-Secretary of State for Scotland (Mr. John MacKay): The European Commission first proposed the IDP and, in the light of progress, it would be for the Commission to propose an extension if it believed one to be warranted. If it did so, the Government would evaluate the proposals carefully.

Mr. Stewart: In view of the satisfactory and widespread take-up of the grant available, does the Scottish Office intend to make its own approach to the EEC for an extension of the programme? In view of the wide take-up, will the hon. Gentleman ensure that there is a proper return on investment by all concerned by saving the agricultural advisory service from the cuts that he intends to make?

Mr. MacKay: I certainly hope that there will be a good return on the investment of £12 million by the Government and £8 million by the EEC for agriculture and fisheries and the additional £36 million from the Government for infrastructure and other activities. The IDP regulations


require the Commission to submit a progress report before April 1986 and to make proposals to the Council of Ministers before 1987 as to whether the IDP should be extended. As I have said, we shall consider carefully anything that comes from the Council then.

Dr. Godman: With regard to European Community involvement in Scotland, what is the likelihood of the Government conducting a review in the near future—

Mr. Speaker: Order. I hope that the hon. Gentleman is referring to the Western Isles.

Dr. Godman: I am referring to the whole of Scotland.

Mr. Speaker: The question relates to the Western Isles. Can the hon. Gentleman get his question into order? If not, I call Mr. Kennedy.

Mr. Kennedy: In representations about the IDP in relation to the Western Isles, will the Minister bear in mind that the agricultural development programme—or the assisted development programme, as it is also described—covering the Western Isles and other parts of the Highlands and Islands commands broad public support in those areas and also within the Commission and that the Government were committed to it before the last election? Does the lion. Gentleman agree that it is misleading always to say that it is up to the Commission to make proposals when those of us who represents the interests of the Highlands and Islands know — the right hon. Member for Western Isles (Mr. Stewart) will confirm this —that at present there is a more sympathetic ear from the Commission than from the Scottish Office?

Mr. MacKay: On the last part of the question, the hon. Gentleman is quite wrong. The Government are fully aware of the disadvantages of the Highlands and Islands. That is why we have injected substantial sums into the Highlands and Islands Development Board and introduced measures such as the recent enhancement of hill subsidies in the Highlands and Islands development area. As we have said before, however, it is for the Commission to come up with proposals for a development programme and we have undertaken that any such proposals will be given careful consideration.

Conservation

Mr. Hardy: asked the Secretary of State for Scotland if he will advise the chairman of the Forestry Commission to establish improved arrangements for consultation with responsible organisations concerned with conservation; and what arrangements for such consultations currently exist.

Mr. John MacKay: Discussions take place between the Forestry Commission and conservation bodies and there are many close contacts at local level. My right hon. Friend has no reason to think that the commission is unaware of the views of conservation bodies or that it fails to take them into account, and he is not convinced that there is a need for the introduction of any more formal arrangements.

Mr. Hardy: Is the hon. Gentleman aware that there is widespread continuing concern that the Forestry Commission is reluctant to engage in meaningful consultation with responsible conservation bodies? Does

he agree that there should be further examination of this matter to ensure that a sensible policy on broadleaved woodlands emerges?

Mr. MacKay: Most of the major conservation organisations will have had four opportunities to express their views to the Forestry Commission—in comments invited before the publication of the paper, in accepting the open invitation to submit written comments, by attending the seminar which was held on 8 May and by submitting written comments in a paper on that seminar. I think that every opportunity has been given to the conservation lobby to consult the Forestry Commission.

Sir Hector Monro: Is my hon. Friend concerned at the increasing trend towards undertaking afforestation without grants? Does he agree that this takes away the limited control over planning through the grant system and that, therefore, conservation and Scotland's scenic beauty are increasingly at risk?

Mr. MacKay: The case in the south of Scotland is the first major case of its kind in 10 years. The action taken by the owners of the land is to be deplored. It would be unfortunate if this incident were used to undermine confidence in the consultation procedures, which have proved highly effective over the years.

Mr. John Mark Taylor: Will my hon. Friend accept that many of us on the Conservative Benches are also concerned about the broadleaved woodlands? When my hon. Friend speaks to the chairman of the Forestry Commission, will he tell him that many of us who take pleasure in the countryside take no pleasure whatsoever in seeing the broadleaved woodlands steadily eroded, very often by alien trees?

Mr. MacKay: I did not quite catch the last part of my hon. Friend's question. The Government and the Forestry Commission are well aware of the importance of broadleaved woodlands. That is why the Forestry Commission produced the paper and is having such widespread consultation on the future of broadleaved woodlands. My right hon. Friend the Secretary of State expects to make a statement on the matter before the summer recess.

Mr. Dalyell: Will Parliament have an opportunity to debate the statement before decisions are taken?

Mr. MacKay: As I have just said to my hon. Friend the Member for Solihull (Mr. Taylor), my right hon. Friend the Secretary of State expects to make a statement on this matter before the summer recess. Questions of debate are for my right hon. Friend the Leader of the House and not for me.

Mr. Home Robertson: Will the Under-Secretary of State say something about the disturbing case at Crichness in my constituency, where a private forestry company has completely disregarded the previously accepted system of controlling afforestation through forestry grants, which are supposed to take account of environmental and social concerns? In view of the damage that blanket afforestation could cause to the economy and environment of many hill farming areas, will the hon. Gentleman intervene to prevent a precedent from being set?

Mr. MacKay: As usual, the hon. Gentleman has greatly over-reacted to something that is, as I said to my hon. Friend the Member for Dumfries (Sir H. Monro), the


first major case of its kind in 10 years. I think that I have made the Government's position clear. We deplore what has happened there. It would be unfortunate if the incident were used to undermine confidence in the consultation procedures, which have proved highly effective. Obviously, we shall carefully watch this case, and any others that come behind it.

Mr. Key: As my right hon. Friend the Secretary of State is responsible for trees in my constituency of Salisbury, will my hon. Friend give an undertaking that, in the review of broadleaved woodlands policy, a proper balance is maintained between the preservation of the environment and employment opportunities in forestry-related industries?

Mr. MacKay: I thought for a moment that my hon. Friend was going to invite me to come to Salisbury. One has to take a broad view of forestry in the countryside. It has an important part to play in conservation, but it is also an important provider of employment in the rural areas.

Employment Prospects

Mr. James Hamilton: asked the Secretary of State for Scotland when he will next meet the general secretary of the Scottish Trades Union Congress to discuss the employment prospects for Scotland and Lanarkshire in particular.

Mr. Younger: I have no such meeting arranged, nor has any such meeting been requested.

Mr. Hamilton: As the right hon. Gentleman is aware, Labour Members have been persistent and insistent and will continue to be persistent in trying to alleviate the scourge of unemployment in Scotland, and in Lanarkshire in particular. As he is aware, two cases of major redundancies have been made known to us in my own constituency, and one company is teetering on the edge of bankruptcy. At the same time, many of the lads and lasses in the youth opportunities programme have not yet had their first job. Many people between 45 and 55 are still unemployed and have been unemployed for over two years. If the Government are not prepared to align themselves with the Centre Forwards, will they align themselves with the sweepers and try to sweep up this scourge?

Mr. Younger: I appreciate the hon. Gentleman's great concern about unemployment, which is shared by hon. Members in all parts of the House. The hon. Gentleman's description of some of the ill effects of unemployment is correct and should be borne in mind by everyone in the House. But it is unfair not to mention the large amount of work that has been done, the huge amount of money put into the youth training scheme, and before that the youth opportunities programme, and also some of the items of good news industrially in his own part of the world, including the better news regarding Terex and new orders for TWC.

Mr. Hirst: Does my right hon. Friend agree that the future of Ravenscraig is vital to employment prospects in Lanarkshire? Will he and his ministerial colleagues do everything possible to impress on the British Steel Corporation the need to invest in new coke ovens so that Ravenscraig can continue to produce competitively priced steel?

Mr. Younger: As my hon. Friend knows, I watch the position very closely. No such proposals have yet been made to the Government. When they are, I shall be looking into them very carefully.

Mr. Martin: The right hon. Gentleman may know that it has been announced that by 1987 the work force in the British Rail workshops will be reduced to about 460 people, salaried and non-salaried. He will know that since the new year the Alliance Box Company has closed down, White Horse Whisky has closed down, and now it appears that the only railway workshop in the country will possibly close down, because it cannot be sustained with that number of personnel. Will the right hon. Gentleman come to Springburn and do something for the people in that community?

Mr. Younger: I am extremely concerned to hear the news this morning about the railway workshop, and I echo the hon. Gentleman's concern about it. I am glad that BREL and the Scottish Development Agency are financing a study, commissioned by Glasgow Opportunities, into alternative employment opportunities in the area, and that BREL has allocated £500,000 towards putting the recommendations of the study into effect. The decision is for BREL, and it is caused by the fact that it has spent so much money in modernising railway stock that it does not need so many people to maintain old stock. It is a commitment from British Rail which, alas, has very unfortunate consequences for us.

Mr. Malone: Is my right hon. Friend aware of the deep concern in the city of Aberdeen about the employment prospect for workers in the Hall Russell shipyard? Will he do what he can to ensure that the yard is disposed of as quickly as possible so that uncertainty can be dispelled? Will he also ensure that, when the yard is disposed of, it will be on terms that allow it to be as competitive as other yards in the United Kingdom?

Mr. Younger: My hon. Friend has expressed great concern to me about this matter. In the Scottish Office we are also very concerned. I agree with him that the most important task is to end the uncertainty, and that the yard should be given the best possible opportunity to be competitive and get new work.

Mr. George Robertson: Does the Secretary of State realise that one Lanarkshire person in every five is out of work and that each is a major human, economic and social tragedy? Does he accept that that well merits the-strictures in Oxford last night by the right hon. Member for Cambridgeshire, South-East (Mr. Pym). Instead of giving us, at Question Time after Question Time, soft words of sympathy on unemployment, will the Secretary of State take the advice of his right hon. Friend and embark on a major investment programme in Scotland and get people back to work?

Mr. Younger: I am very anxious not to make the position worse by putting many other people out of work through raising interest rates and taxation to levels that businesses cannot afford.

Mr. Henderson: Can my right hon. Friend confirm that during the past year there has been an increase in the number of people in work in Scotland? Can he say what sectors of the economy have shown that increase? Will he discuss with the Scottish TUC whether, in concert with the


CBI, its experience is that the prospects for stability of employment in the manufacturing sector are now more encouraging than for many years?

Mr. Younger: It is encouraging that for the past year there has been an increase in employment in Scotland. That must be the first step towards obtaining a reduction in unemployment. The increases have been principally in the service sector, which has been performing very strongly during the past few years. However, during the past year the manufacturing sector has also begun to increase employment, which is an encouraging sign.

Mr. Ewing: Is the right hon. Gentleman aware that the only growth industry in Scotland is the working parties being set up by him to consider alternative employment for those made redundant by the Government's economic policies? What will he do about the 600 redundancies announced today at the British Rail workshop at Springburn? Is he in favour of British Steel investment at Ravenscraig to replace the coke ovens? When will he stop expressing such pious concern while unemployment in Scotland continues to go up and up?

Mr. Younger: The hon. Gentleman's remarks would hold water only if his opening remark had been true. I wonder where he has been during the past few years. What about the oil industry, the electronics industry and the health care industry?

Mr. Ewing: They are all employing fewer people.

Mr. Younger: That is a totally untrue statement. All the industries that I mentioned are employing more people. I suggest that the hon. Gentleman gets his facts rights before he makes such statements.

Local Government Finance

Mr. MacKenzie: asked the Secretary of State for Scotland how many representations he has received on the raising of local government finance; and if he will make a statement.

The Parliamentary Under-Secretary of State for Scotland (Mr. Michael Ancram): My right hon. Friend has received some 15,000 representions on the linked subjects of rates, revaluation and local taxation. Many of these suggest changes in the method of financing local government.

Mr. MacKenzie: Is the Minister aware that although many of us gave a guarded welcome to the proposals announced yesterday, we feel that they were hastily conceived? Many of us believe them to be a temporary, patch-up job. Is the Minister aware that we want the Secretary of State to go back to his office and take plenty of time to talk to local authority people and those who know about these matters, and return to the House with proposals on rating, valuation and rate support grant that will he fair, equitable and lasting for the future of Scotland?

Mr. Ancram: I thank the right hon. Gentleman for his welcome — even though a little grudging — for the package announced yesterday. That is in line with the welcome given to it by ratepayers in Scotland. I find it difficult to understand how he could suggest that the scheme was hastily conceived when, for the past five weeks, others in this House have accused the Government

of not coming forward with a scheme soon enough. We waited until we had the information we required to prepare a scheme that could work. When we had that information, we announced the scheme. The right hon. Gentleman knows that there is a current Government review, of which I am a part, looking at the whole system of financing local government. We hope to come forward with proposals this year.

Mrs. McCurley: While I congratulate my right hon. Friend the Secretary of State on his supreme efforts during the past few days to alleviate the problems of ratepayers in Scotland, may I suggest that before we make any radical alterations to the rating system we do not go from the frying pan into the fire, that we halt the decline in rate support grant and that we stop hooking the local government line with a sharp stick and reach a conciliatory point with it? That is absolutely necessary if we are to treat with local government over the next few years, which, after all, we must do, and which our supporters want us to do.

Mr. Ancram: I agree with my hon. Friend that the proposals that the Government bring forward with regard to the system of financing local government must be workable. It is for that reason that we are taking time in considering them. I believe that we will be able to come forward with something that meets that requirement. I further agree with my hon. Friend that we want to have good relations with local government. Last year, when there was a gap of some £200 million between that which it wished to spend and the level at which we believe it should be spending, we came halfway to meet it by enhancing the provision made by £98 million. We looked to it then, and we look to it now, to play its part. If it sticks within the reasonable spending guidelines set by the Government, there is no reason why we should lot have the sort of relationship that my hon. Friend seeks.

Mr. Roy Jenkins: Can the hon. Gentleman confirm that in his right hon. Friend's scheme announced yesterday there is no tapering provision and that, therefore, for somebody short of a threefold increase in valuation with, say, a factor of 2·8 per cent., which probably means an increase in the actual bill of 80 to 100 per cent., there is no benefit at all, whether domestic or commercial: In view of the fact that this has to be seen in circumstances in which the Secretary of State has taken unprecedented steps to interfere with local government finance, and in which there is an alleged Government achievement of an inflation target of 4·5 to 6 per cent., this cannot be regarded as a matter for congratulation of the Secretary of State's administration of the Scottish Office.

Mr. Ancram: I do not know whether the right hon. Gentleman was present yesterday when my right hon. Friend made his statement, but, if he was, I do not think that he has understood the scheme that has been proposed. The scheme is quite simply to ensure that nobody suffers rate increases as a result of having a revaluation of over three times the valuation he had previously, so that those who benefit will benefit down to that extent only I think that that is a fair way of doing it. If I may say so, it is somewhat in line with the proposals that were put forward by the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) in his ten-minute Bill. The only difference—and I fear that this seems to be part of the alliance's way


of calculating things—is that he got his calculations on what it would cost wrong by a factor of 10. That seems to be endemic in the Liberal party at present.

Mr. Dewar: First, I congratulate the hon. Member for Renfrew, West and Inverclyde (Mrs. McCurley) on what she said, which was certainly welcome. May I suggest to the Minister that, if he wants to make peace with local government, one contribution might be to refrain from financing the package announced yesterday from a general abatement clawed back out of the already inadequate spending allowed to local authorities? Can he confirm—because we want to avoid doubt and know exactly where we stand—the views of the Secretary of State that a manifesto commitment at the next election to rating reform will not do, and that the Scottish Office will therefore be in a position not only to produce a scheme but to legislate on rating reform in this Parliament?

Mr. Ancram: The hon. Gentleman has quoted, I think accurately, what my right hon. Friend said at the conference, and that is of course the position. I think that many of us would be interested to know the views of the Labour party on rate reform. Opposition Members critise easily and give only grudging acceptance to the scheme that we put forward yesterday, but we hear nothing from them as to whether they wish to see the present rating system reformed or replaced. We look forward to hearing that in the future. As to the penalties, the hon. Gentleman knows full well that last August, a long time before revaluation took place, we were warning authorities that if they spent over the guidelines they would face penalties far more severe than those which were imposed last year. That has been the case, they made their spending decisions in the light of that knowledge, and we hope very soon to be able to announce the details of the penalties.

Rates

Mr. David Marshall: asked the Secretary of State for Scotland what further additional assistance he intends to give to scottish ratepayers.

Mr. Wallace: asked the Secretary of State for Scotland whether the Government intend to seek to take any immediate action to relieve the rates burden on those commercial businesses most adversely affected by recent rates increases.

Mr. Kirkwood: asked the Secretary of State for Scotland what proposals he is considering for rating reform in Scotland to relieve the added financial burden on many small businesses during the present financial year.

Mr. Ancram: I refer the hon. Gentlemen to the statement my right hon. Friend made yesterday.

Mr. Marshall: Yesterday's statement anticipated many of today's questions, but for domestic ratepayers this is a case of too little too late. Will the Minister give a categorical assurance that this level of relief will continue for each year until revaluation takes place in the rest of Britain, when the situation can be reviewed? Will he also give an assurance that it will all be new money and that it will not be taken from the Scottish Office budget or recouped by further cuts in local government rate support grant?

Mr. Ancram: As my right hon. Friend the Secretary of State said yesterday, we are talking about new money.

The hon. Gentleman claims that we are giving too little too late to domestic ratepayers. He might like to consider the fact that the domestic relief element of the rate support grant, which directly benefits domestic ratepayers, was increased by £88 million this year, in addition to the £10 million announced yesterday. We have reacted to the revaluation problems in an exceptionally generous way and I am sure that the ratepayers of Scotland recognise that. As my right hon. Friend said yesterday, we shall consider what will happen next year in the autumn, when we make decisions on public expenditure for next year.

Mr. Wallace: Since the Chancellor of the Exchequer warned the Scottish Conservatives in Perth that he might not be so open-handed next year, can the Minister assure the House that the Secretary of State will at least argue his corner in Cabinet next year to achieve a similar arrangement? If it is not too late, will the Minister accept the need to consider the particular difficulties facing distilleries in Scotland, in particular two in my constituency, which face rate increases of over 80 per cent.? Will he give them special assistance this year and in future years?

Mr. Ancram: The hon. Gentleman's concern for the Scottish ratepayers is in distinct contrast to that shown by his hon. Friend the Member for Gordon (Mr. Bruce), who yesterday said that the package showed warped priorities. I wonder how many Scottish ratepayers will regard the package that way. We shall take decisions about next year in the autumn when we consider the rate support grant settlement and the domestic and other elements.

Mr. Kirkwood: I endorse what the Government have done, but will the Minister accept that there is an element of rough justice in the way in which the ceiling is applied? Has the Minister any plans to help the small business man with a multiplier of less than a factor of three who might still be put out of business? Has he any plans to consider his plight?

Mr. Ancram: We had to create a level of protection which we believed to be correct. The factor of three in terms of a multiplier on valuations covers the worst of the examples that have been drawn to our attention. As my right hon. Friend said yesterday, it covers about 50,000 commercial subjects. On the basis of those figures it is clear that many people who have been hard hit by the revaluation will benefit. I believe that the system is fair. When the details are made clear the hon. Gentleman might agree that it is fair.

Several Hon. Members: rose —

Mr. Speaker: Order. There was a statement yesterday on this subject, so today I propose to give priority to those right hon. and hon. Members who were not called yesterday.

Mr. Fairbairn: Does my hon. Friend appreciate that, although we are grateful for the increase in money for domestic and commercial rate relief, quoting figures does not assist domestic or commercial ratepayers who are being asked to pay extra sums in rates which are uncommercial because they simply cannot afford them? Will he consider a scheme which, after the application of the announced scheme, is equitable and provides an equitable remedy for those who are caught in the rates poverty trap?

Mr. Ancram: I have to agree with my hon. and learned Friend that in some instances even a small increase in rates, of the type that has been imposed in past years, will cause problems. Even my hon. and learned Friend would not expect a scheme to be so sensitive as to deal with such instances. We have reached a formula by which, on the data available, we believe that the worst of the increases, such as those in my hon. and learned Friend's constituency which he drew to my attention, will be mitigated. I hope that my hon. and learned Friend's welcome for the scheme will be further enhanced when he sees the details of it and realises what it will mean.

Mr. Gourlay: Is the Minister aware that relief for domestic and commercial ratepayers, with which I agree, sets aside decisions by assessors? Will the Minister therefore take a further step and encourage the Scottish assessors to agree a basic system of valuation for Scotland and so prevent the assessor in Fife from going his own solitary way and deciding on his own the basis for certain properties?

Mr. Ancram: I do not think it can be said that we have set aside the decisions of the assessors, because, as my right hon. Friend the Secretary of State said yesterday, there is a gap between the neutral effect of revaluation and the three times multiplier. Within those areas, the effects of the assessors' valuations will still be felt. It is important to remember that the basis of the system in Scotland is that the assessors are independent; they come to their judgments independently and, if necessary, they have to defend those judgments before the courts. There is an appeal system. Where valuations are felt to be unfair, I hope that people will make use of that appeal system, which we improved last year.

Mr. McQuarrie: I congratulate my right hon. Friend the Secretary of State on his most excellent statement to the House yesterday, which was widely welcomed in Scotland despite what we heard from the Opposition. Can my hon. Friend give any advice to highly rated commercial and domestic ratepayers, who have already received their demand notices, about whether they should withhold payment of their rates pending publication of the details of the Bill that my right hon. Friend the Secretary of State will introduce?

Mr. Ancram: The information that my right hon. Friend the Secretary of State gave yesterday is sufficient for both domestic and commercial ratepayers to calculate whether they will benefit under the scheme, and by how much, because it is related to the amount of rates that is applicable as a result of their revaluations being over the three times multiplier. As those people will know that they will receive relief for that amount, I hope that they can make their business and commercial judgments accordingly.

Mr. Robert Hughes: Will the legislation make it clear that this is not a one-off exercise? Otherwise, what the Secretary of State offered yesterday will be seen as a sop to dissipate anger, but the anger will be much greater next year when the rate increases have to be met. Will the Under-Secretary guarantee that the Bill will carry on the Secretary of State's commitment to extra relief for more than one year?

Mr. Ancram: My right hon. Friend said yesterday that he had heard what hon. Members had had to say about that

matter. However, the details of the Bill must remain confidential until the Bill itself is published. That is the normal way in which things are done in the House. We hope to be able to publish the Bill shortly, and at that time the details will become apparent to the hon. Gentleman.

Glenochil Institutions (Report)

Mr. Steel: asked the Secretary of State for Scotland if, following receipt of the report of his working party studying the Glenochil institutions, he will make a statement.

Mr. Younger: The report of Dr. Chiswick's working group on suicide precautions at Glenochil will be published as soon as possible after I have received it. Fatal accident inquiries into the two most recent deaths at Glenochil have been arranged to start on 28 May and 12 June respectively. I shall consider the determinations of those inquiries, as well as the findings and recommendations of the working group, carefully and as a matter of urgency. I shall inform the House of my conclusions as soon as possible thereafter.

Mr. Steel: I thank the Secretary of State for that statement. Does he accept that there is still unease that there is not a more widespread inquiry into sentencing policy in Scotland? For example, will the workingparty that he has set up be empowered to take evidence from former inmates or the parents of former inmates of the Glenochil institutions?

Mr. Younger: I am grateful to the right hon. Gentleman for his acceptance of what I said. I do riot rule out some form of wider inquiry if we find from the report of Dr. Chiswick or from either of the fatal accident inquiries that further matters need to be investigated. I should not like to rule that out at this stage. With regard to further evidence, it is important that we should not delay Dr. Chiswick's report, or any others, by widening the working group's terms at present. I should prefer to get its results and then make any further inquiries that are necessary in the light of those results.

Mr. O'Neill: I welcome the Secretary of State's comments, which endorse what was said by his hon. Friend the Parliamentary Under-Secretary, the hon. Member for Edinburgh, South (Mr. Ancram), in the debate two weeks ago. May we take it therefore that once the sub judice limitations of the fatal accident inquiries are out of the way it will be possible for the Government to institute a wider inquiry, and that that will mark a change in the Government's attitude to wider-ranging inquiries into Glenochil and other young offenders' institutions?

Mr. Younger: I do not think that I would wholly accept what the hon. Gentleman says. It is not really the sub judice position that prevents a further inquiry at this stage—although I believe that it would do so. The point is that we need to get a response to the initial inquiries first, to find out what else—if anything—we need to know. For my part, I wish to be as open as possible about the whole matter. If further matters need to be inquired into, I shall be glad to arrange that in due course.

Mr. Dewar: I am grateful to the right hon. Gentleman for what he has said, which is helpful on the whole. The Opposition support the need for a detailed inquiry into the handling of suicide risk patients. The fatal accident


inquiries are of course, essential, and I accept that they must be dealt with first. However, there is a strong feeling on the Labour Benches that we should consider the separate but important issue of whether it is right that detention centres should have been established as the only custodial option for many young offenders. That should be high on the agenda once the immediate inquiries into these tragic deaths have been completed.

Mr. Younger: I would be very happy for the whole subject, in its widest sense, to be on the agenda, and to co-operate in any suggestions that the hon. Gentleman has for discussing the matter or inquiring into it more widely, once we have received the preliminary results. There has been considerable widening of the methods of treatment of young offenders in recent years, and I see no reason why we should not examine the position further to see whether still more improvements could be made.

Oral Answers to Questions — SOLICITOR-GENERAL FOR SCOTLAND

Drunkenness

Mr. Hirst: asked the Solicitor-General for Scotland how many people in Scotland were charged with the offence of being drunk and incapable in the most recent 12-month period for which figures are available.

The Solicitor-General for Scotland (Mr. Peter Fraser): Provisional figures for 1984—the most recent 12-month period for which figures are available—reveal that 6,581 persons were proceeded against for the offence of being drunk and incapable.

Mr. Hirst: I am grateful to my hon. and learned Friend for his reply. Does he agree that it would be more appropriate to treat a drunk in a detoxification centre than in a police court? If so, will he place on record the fact that he accepts that the DHSS resettlement unit at Bishopbriggs is fulfilling a vital role in treating chronic drunks in the west of Scotland?

The Solicitor-General for Scotland: I can make no particular comment on the unit at Bishopbriggs, although I know that my hon. Friend has taken a special interest in its work. However, there has been a great improvement in Grampian region and in Aberdeen city, where we have had a dreadful problem of people being drunk and incapable. They are now being referred to the detoxification centre, which is very often a much more appropriate way of dealing with the problem.

Mr. Maxton: Will the Solicitor-General for Scotland give us the figures for those in the west of Scotland who, instead of being charged with being drunk and disorderly and other drunkenness offences, have been taken to a detoxification unit? If the answer is none, when are the Government going to fulfill the pledge to decriminalise drunkenness that they made five years ago in the criminal justice legislation?

The Solicitor-General for Scotland: I commend the hon. Gentleman for repeating the points that he made in a recent debate during proceedings on the Law Reform (Miscellaneous Provisions) (Scotland) Bill. Strictly speaking, this is not a matter for me, but I have already made it clear that, generally speaking, if we can take people who are simply drunk and incapable out of the courts and use detoxification instead, that is something to be desired.

Mr. Johnston: The search for a designated place is being actively pursued in Inverness. In view of what the Solicitor-General for Scotland has said about detoxification centres, can he assure us that there will be financial support from the Government for such an objective?

The Solicitor-General for Scotland: Although, with my responsibilities, I take a great interest in the handling of such matters, they are, strictly speaking, a matter for my right hon. Friend the Secretary of State for Scotland. I refer the hon. Gentleman to what my hon. Friend the Member for Argyll and Bute (Mr. MacKay) said during an interesting debate on the matter during the Report stage of the Law Reform (Miscellaneous Provisions) (Scotland) Bill.

Mr. Fairbairn: Can my hon. and learned Friend give the House a breakdown of the figure of 6,500? Are there 65 people who are charged a hundred times each, or 6,500 people who are only charged once?

The Solicitor-General for Scotland: No, I cannot, but the point implicit in my hon. and learned Friend's question is one that I appreciate. Often, unhappily, those convicted of being drunk and incapable are repeatedly taken before the courts for the same offence.

Coal Industry Dispute

Mr. Canavan: asked the Solicitor-General for Scotland how many people were (a) arrested, (b) charged and (c) prosecuted as a result of incidents arising from the miners' strike; and, of those charged, how many the procurators fiscal have decided definitely not to prosecute.

The Solicitor-General for Scotland: As at 8 May 1985, 1,504 persons had been arrested; 1,483 persons had been charged by the police and criminal proceedings had been instituted by procurators fiscal against 1,004 persons as a result of incidents related to the miners' strike. Procurators fiscal decided not to take criminal proceedings against 450 persons reported as a result of such incidents.

Mr. Canavan: Does the hon. and learned Gentleman agree with the principle that no one should be punished twice for the same offence? If so, will he appeal to Albert Wheeler to stop his witch hunt and to reinstate all sacked miners, given that the loss of a man's livelihood is in most cases a much more severe punishment than that meted out by the courts?

The Solicitor-General for Scotland: It is an essential principle of the criminal law in Scotland that no one should be subject to any double jeopardy. I have attempted to answer this question on at least three occasions. The hon. Gentleman must appreciate that how the National Coal Board deals with matters such as industrial misconduct following criminal conviction is entirely a matter for the NCB. The hon. Gentleman would be very surprised if I sought in any way to interfere in that.

Mr. Eadie: The hon. and learned Gentleman, who is accountable to this House, surely cannot sidestep a question such as this—even the question of legality—given that he is a member of the Government. He must be aware that double jeopardy is involved in these cases, because a man is not only found guilty of the offence but loses his job. Is the hon. and learned Gentleman aware that although the strike ended months ago, the number of victimised miners is increasing—initially it was slightly more than 200, and now it is more than 300?

The Solicitor-General for Scotland: Industrial misconduct and possible dismissal arising from it is not a matter for me. If the NCB or any other employer has acted in breach of the law in dismissing these persons, a clearly defined remedy is available through the industrial tribunals. Miners who feel that they have been unfairly dismissed have the opportunity to take advantage of that. I am responsible for criminal convictions arising out of criminal offences. The hon. Gentleman will particularly appreciate that it would he quite wrong for me to seek to interfere with any decisions taken by the NCB in relation to employment and industrial misconduct.

Mr. Bill Walker: Does my hon. and learned Friend agree that, in relation to people arrested and later charged, it is common practice among procurators fiscal not to proceed for a variety of reasons? Consequently, the figures that emerge here are not dissimilar from what one would expect in other circumstances. There is nothing unusual about an individual being dismissed for conducting himself in a manner considered to constitute industrial misconduct. It happens to bus drivers, lorry drivers and others who are found guilty in the courts of offences that affect their jobs.

The Solicitor-General for Scotland: My hon. Friend is quite right. There are a variety of reasons why, at the end of the day, procurators fiscal determine not to institute proceedings against individuals. A discretion is vested in those procurators fiscal, and on a number of occasions —not just arising out of the miner's strike, but more generally — they determine that there should be no proceedings, although prima facie, on the basis of the information available to them, there had been a breach of the law.

Mr. Dewar: Has the hon. and learned Gentleman noticed that out of the first 603 people prosecuted as a result of the miners' strike, only six were convicted of assault, five for carrying offensive weapons and 27 for vandalism—a total of 38? All the rest were charged with much more minor offences such as obstruction or breach of the peace. Does that square with the claim that all the miners who have been dismissed have been guilty of serious offences against other miners, their families or board property?

The Solicitor-General for Scotland: As the hon. Gentleman appreciates all too well, in Scotland the offence of a breach of the peace covers a very wide range of conduct, and in some circumstances a breach of the peace can be a very serious matter. On the basis of the figures that the he has advanced, and those which he has extracted from all the figures that are available, I must repeat that it is for the NCB to determine what it considers to be industrial misconduct giving rise to dismissal. As the hon. Gentleman also appreciates, if the NCB is wrong, the industrial tribunals can reach a different determination.

White Fish (By-catch Prosecutions)

Mr. Wallace: asked the Solicitor-General for Scotland how many prosecutions and convictions there have been in Scotland since September 1984 for offences arising out of a white fish by-catch in excess of the permitted 18 per cent. by-catch in the Norwegian pout fishery.

The Solicitor-General for Scotland: One.

Mr. Wallace: I note that there has been only one prosecution. Will the Solicitor-General confirm that, before prosecutions are instituted, the actual by-catch which has been measured as a sample is usually much in excess of 18 per cent. and, indeed, is about 24 or 25 per cent.? Will he accept that because of that Danish boats fish for pout in waters which they previously did not fish? Will he give all support to his colleagues who, at the forthcoming meeting of the EC Council of Fisheries Ministers will try to reduce the by-catch to 10 per cent.?

The Solicitor-General for Scotland: As the hon. Member appreciates, my right hon. Friend has already given an answer on the appropriate level of by-catch. Between October 1984 and March of this year 70 boardings were made by enforcement officers; in 53 of these by-catches of under 10 per cent. were found and in 17 there were by-catches of over 10 per cent., but still under 18 per cent. There was only this one case where the by-catch exceeded 18 per cent. I hope the hon. Member will be reassured that the extent of the by-catch by Danish fishermen has not been so great as to be a cause of anxiety to fishing organisations in Scotland. If the hon. Gentleman has any other information I hope that he will make it available.

Early-day Motion 686

Mr. George Foulkes: On a point of order, Mr. Speaker. May I draw your attention to early-day motion 686—
[That this House condemns the reported statement of the hon. Member for Carrick, Cumnock and Doon Valley that the Falkland Islanders lacked guts and calls upon him to withdraw the statement; and further calls upon him to give up his campaign of rewriting the history of the events before, during and after the conflict which is designed to justify his attitude towards the sending of the Task Force to restore freedom, the rule of law and democracy to the islands after the unprovoked invasion by the Argentinians.] —
and also to Prime Minister's questions yesterday when comments were made based on reports in the national newspapers which were completely untrue? May I tell you and the House that at the incident concerned no water jug or glass was involved and no scuffle took place? The Secretary of State for Defence was not involved, and he will confirm that. The statement attributed to me was not correct. I said that the mothers of the disappeared are as brave as any Falklander, and I stand by that.
I have subsequently had an apology from Reuters, which issued the statement. May I now ask how I can get an apology from the hon. and learned Member for Burton (Mr. Lawrence), the Prime Minister and the hon. Member for Tayside, North (Mr. Walker) and his colleagues who put down the early-day motion, no doubt in good faith but based on an entirely untrue report?

Mr. Speaker: I have allowed the hon. Gentleman in fairness to put his point of view to the House. The hon. Members concerned will have heard what he said.
Later —

Mr. Bill Walker: On a point of order, Mr. Speaker. Early-day motion 686 stands in my name. I accept unreservedly what the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) has said and I am prepared to withdraw any criticisms that are implied in the motion. However, Mr. Speaker, you will remember that yesterday—

Mr. Speaker: Order. I hope that the hon. Gentleman will not qualify his generous withdrawal.

Mr. Walker: You will remember, Mr. Speaker, that I spoke about the matter during yesterday's proceedings, again on a point of order. I said that matters had developed because of the radio broadcasts from the Falkland Islands. I listened on Radio Clyde, of which the hon. Gentleman will be aware, to the tape recordings of the radio programmes. However, I am still prepared to accept his categorical assurance that he did not say that which was contained in the broadcasts, and I withdraw unreservedly any criticisms that are implied in the motion. However, I remind the hon. Gentleman of the submarine—

Mr. Speaker: Order. I think that the hon. Gentleman has done very well.

Animal Experiments

Mr. Roland Boyes: On a point of order, Mr. Speaker. Today the Home Office has issued a supplementary White Paper on the scientific procedures on living animals. It was issued at a press conference thereby giving the press an opportunity to question the Home Secretary. I hope that you, Mr. Speaker, will support my view that on such an important matter a representative of the Home Department should have been in the Chamber today to answer Members' questions on the paper. Many people are concerned about animal experiments. In fact, with your permission, Mr. Speaker, on Friday morning I shall present a petition signed by 500,000 people who are concerned about the outrageous and barbaric LD 50 test. I mention that only to show you the magnitude of the concern of the British people about animal experiments.
Is it within your power, Mr. Speaker, to insist that the Home Secretary or one of his junior Ministers should come before the House and allow Members of Parliament to have the same right as members of the press have had today?

Mr. Speaker: The hon. Gentleman knows that I feel strongly that this House should be the forum of the nation where we should discuss all these matters. It is not a matter for me whether statements are made to the press or elsewhere.

Mr. Gerald Kaufman: Further to that point of order, Mr. Speaker. Is it not a fact that a White Paper is presented to Parliament? Surely that is the purpose of a White Paper; that is what is said on a White Paper. I put it to you as protector of the interests of the House of Commons that for a White Paper to be issued and a statement then made to the press and not to Parliament is offensive to the interests of Parliament.

Mr. Speaker: That is as may be, but, unhappily, it is not a matter for me.

Questions to Ministers

Mr. John Maxton: On a point of order, Mr. Speaker. During Question Time the Secretary of State said when answering a question on the teachers' dispute that he had two observers on the management side of the teachers' negotiating machinery. That is an incorrect statement. The fact is—

Mr. Speaker: Order. The hon. Gentleman is seeking to perpetrate a practice of which I think the entire House disapproves, which is to continue Question Time. Hon. Members often feel that Question Time should continue but, in fairness to others, I cannot allow the hon. Gentleman to continue with his point of order.

Early-day Motion 692

Mr. Harry Ewing: On a point of order, Mr. Speaker. I draw your attention to early-day motion No. 692.
[That this House expresses its surprise at the non-participation of the Right honourable Member for Chesterfield in the debate on the Second Reading of the Oil and Pipelines Bill on 14th May.]
I have not contacted the hon. Member for Nottingham, East (Mr. Knowles), who tabled the motion, and I imply no criticism of any hon. Member who tables an early-day motion which is accepted by the Table Office.
My point of order turns on the acceptance of an early-day motion that seeks to criticise a right hon. Member for not seeking to take part in a debate. It is a dangerous precedent. It presupposes that if any right hon. or hon. Member seeks to participate in a debate the occupant of the Chair will automatically call him. There is a host of reasons why from time to time right hon. and hon. Members do not seek to take part in debates. If the Table Office is to accept such motions as early-day motion 692, I can assure you, Mr. Speaker, that the Order Paper will be littered with them day after day.

Mr. Speaker: The hon. Gentleman has drawn attention to a matter that is important for the entire House. The early-day motion was in order — there was nothing wrong. with it — and that is why the Table Office accepted it. However, I agree with the hon. Gentleman that it is not possible for every hon. Member to take part in every debate. If hon. Members sought to do so, my job would be impossible.

Mr. Alan Williams: On a point of order, Mr. Speaker. I, too, am slightly concerned about early-day motion 692. Any Member could find himself confronted with a motion on the Order Paper condemining him for not taking part in a debate even though he may have attempted to do so. The decision whether a Member takes part in a debate lies entirely within your discretion, Mr. Speaker, as it should do. I am wondering whether it was in order for the Table Office to accept the motion in the first instance.

Mr. Speaker: I have already said that it was. I think that the House has the sense of what I said to the hon. Member for Falkirk, East (Mr. Ewing). I do not think that the tabling of such motions is a very wise practice.

Mr. D. N. Campbell-Savours: rose —

Mr. Speaker: Order. I remind the hon. Gentleman that there is an important debate to follow.

Mr. Campbell-Savours: On a point of order, Mr. Speaker. I can put my point in one sentence. Is not early-day motion 692 a challenge to the Chair?

Mr. Speaker: I do not think so.

Handicapped Young Persons

Mr. Clement Freud: I beg to move,
That leave be given to bring in a Bill to amend the Education Act 1981 to improve provision for handicapped young people; and for connected purposes.
This is International Youth Year. It is right that Parliament should concern itself with young people in general and in particular with those young people to whom nature has given less of a deal than to others. My Bill seeks to do something for young people who have special educational needs.
The House will recall that when the admirable Warnock report became enshrined in legislation in the Education Act 1981, there was general concern about some of its details. We have now had two years of monitoring that Act. I should like to draw the attention of the House to the Official Report of the proceedings on Monday 13 May and Tuesday 14 May and to the replies that I received to my questions.
On Tuesday 14 May I
asked the Secretary of State for Education and Science how many young people there are between the ages of 16 and 19 with special educational needs; and how many places are available for this group in (a) schools and (b) further education".
The reply that I received was:
This information is not available centrally." — [Official Report, 14 May 1985; Vol. 79, c. 105–106.]
On Monday 13 May I
asked the Secretary of State for Education and Science what is the average length of time between a parent appealing to him under…sections (6) of the Education Act 1981 and the announcement of the result of the appeal.
The reply that I received from the Parliamentary Under-Secretary of State for Education and Science was:
The average…is 17 weeks." — [Official Report, 13 May 1985; Vol. 79 c. 54.]
My modest Bill seeks to improve the lot of those young people who are caught by both aspects of the Act. Let me deal, first, with the 16 to 19-year-olds, who were identified by Warnock as one of three priority areas. Local education authorities have a duty under the Education Act 1944 to provide
full-time education suitable to the requirements of senior pupils".
The Act defines a senior pupil as one between the ages of 12 and 19.
The House must understand that a handicapped young person needs to be provided with the opportunity for further education. Some will have missed a substantial amount of schooling and taken longer to assimilate skills. Others need further education for the chance to live an independent life. The opportunity to lead that kind of life can be crucially affected by three years within or outwith education. The present loophole means that some young people — those with less caring local education authorities or with less articulate parents than others—are being denied opportunities which are rightfully theirs. I submit that it is plumb wrong that provision for handicapped people should be a lottery, as it is now, depending not on need or ability but on where one lives and how loudly one's parents can shout.
If I may turn to the appeals procedure, the 1981 Act allows parents to appeal against the statement of needs and the local education authority's proposals to meet those needs. However, the appeal tribunal is prevented by the


Act from taking positive action. It can accept the statement or it can send it back, but it cannot change it. If the tribunal sends it back, the local education authority has no legal duty to change the proposals. I add in parentheses that parents can then go to the Secretary of State for Education and Science, but that is hardly the point.
My Bill will give to the tribunal the same legal powers as those which were given in the 1981 Act to tribunals deciding upon choice of school. It will thus bring to an end legal discrimination between the parents of handicapped children and the parents of other children.
I should like to tell the House about the case of Major Lawson, a gentleman who had two sons with learning difficulties. Under the 1981 Act, the boys were the subject of statements by Surrey local education authority. It proposed that the boys should be sent to a local school and that the local school should be awarded an extra teacher. Major Lawson appealed. The tribunal sent the case back to Surrey local education authority—a clear indication that the tribunal was not satisfied with its proposal—but Surrey declined to do anything about it. Eighteen weeks later the Secretary of State overruled that decision.
Not all children are fortunate enough to have someone like Major Lawson fighting for them. To have children with special educational needs is hard enough without having to fight bureaucracy as well.
I should like to know why it takes 18 weeks for the Secretary of State to make a decision under the 1981 Act. He said that education would be a partnership. I want to make it a genuine, not a weighted, partnership.
I believe that it is right, during International Youth Year, to improve legislation introduced during the International Year of Disabled People. I therefore wish to present the Bill.

Question put and agreed to.

Bill ordered to be brought in by Mr. Clement Freud, Mr. David Alton, Mr. John Hannam, Mr. Jack Ashley, Mr. Dafydd Wigley, Mr. Gordon Wilson, Mr. A. J. Beith, Mr. Charles Kennedy, Mr. Archy Kirkwood and Mr. Michael Hancock.

HANDICAPPED YOUNG PERSONS

Mr. Clement Freud accordingly presented a Bill to amend the Education Act 1981 to improve provision for handicapped young people; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 7 June and to be printed. [Bill 147.]

Opposition Day

[IITH ALLOTTED DAY]—considered

Industry and New Technologies

Mr. Speaker: I have selected the amendment in the name of the Prime Minister. In view of the number of right hon. and hon. Members who have indicated their wish to take part, I propose to apply the 10-minute rule to speeches between 7 pm and 8.50 pm.

Mr. John Smith: I beg to move,
That this House deplores the Government's wilful neglect of British manufacturing industry which has caused the continuous erosion of the individual base, the record high levels of unemployment and the huge and unprecedented trade deficit in manufactured goods; and calls upon the Government to put into effect a programme of industrial regeneration based on the application of new technology to modernise existing industries and to develop new products and processes, the provision of adequate investment for industry in Britain, the necessary provision of research and development and a massive expansion of education and training in order to reduce production costs and increase competitiveness at home and abroad.
Outwith the ranks of Government apologists and acolytes, there are few people in Britain today with any knowledge of our industry who take seriously the Government's claim that their economic and, in particular, industrial policies have been successful. That, of course, is the claim — everthing is improving, increasing or growing. Each week we have to listen to the Prime Minister during Prime Minister's Question Time replying with a carefully manicured set of selective statistics. She will claim that industrial output is better in 1985 than it was in 1981. Perhaps so. It should be. It was at an utterly disastrous level in 1981. The fact that that disastrous level was caused by her policies does not seem to worry her.
The Government's policy is to brass it out, and to batter the critics with selective statistics and sometimes, I understand, with slogans that cause offence to Conservative right hon. Members; to suppress criticism — although not successfully in some cases; to malign critics—that is almost always done; to claim that all public intervention of any kind would be disastrous, despite the evidence of the results of the lack of it; to claim that all spending must be inflationary; and to pretend that one can live comfortably and with a good conscience in a nation where there are nearly 4 million people unemployed, where there is a growing under class of the deeply impoverished, and where the young generation has been condemned to idleness or to a gross diminution of opportunity.
To put matters into perspective, let us remind ourselves of the statistics. Investment in manufacturing is still 25 per cent. below 1979 levels and manufacturing output has far from reached the 1979 levels. What a result of six years' so-called progress. Over those years we have seen a relentless erosion of our capacity for industrial success. Indeed, if production had increased at the levels of 1974 to 1979, it would be 6 per cent. higher than it is at present, which means that a great deal more wealth would have been available to this country.
Mr. John Harvey-Jones, together with Lord Weinstock, in giving evidence in another place the other week, fired


a broadside at the complacent Government by observing that not only did he sell 11 per cent. less of ICI's products in the United Kingdom than he sold in 1979 but that the principal reason for that was that 30 per cent. of his customers had ceased to exist since 1979. [Interruption.] That seems to be the cause of some merriment to the parliamentary private secretary, the hon. Member for Hertfordshire, South-West (Mr. Page). I assure him that it is a matter of deep concern to those customers who have ceased to exist since 1979.

Mr. Richard Page: Is the right hon. and learned Gentleman aware that this is his party's Supply Day and that the packed Labour Benches show the extreme interest of his hon. Friends in what he described as a severe and difficult subject?

Mr. Smith: I was not remarking on that. I was remarking on the fact that the hon. Gentleman appeared to find it amusing that 30 per cent. of ICI's customers had ceased to exist. That should be a matter for shame among Conservative Members.

Mr. Robert Atkins: rose —

Mr. Smith: I have hardly started my speech. Perhaps I may be allowed to develop my case before being interrupted.
In our motion, we draw attention to the catastrophic position in trade and manufactured goods. In 1984, the trade deficit in manufactured goods on current account was £4 billion. That was not some blip in the figures or flash in the pan. In 1983, the deficit was £2·5 billion, and it seems from the figures for the first quarter of 1985 that we are heading for an annual deficit of well over £4 billion.
We see not a word about that from the Government in their rather silly amendment to our motion. However, it throws a searchlight of truth on the Government's selective statistics. We are losing out in the competition with other industrial countries. Not only are we now in deficit where once we were in continuous surplus, but the size of the deficit is alarming.
When he replies, I hope that the Secretary of State will explain precisely what the Government plan to do about this worrying trade deficit. What is their view of it? We have never heard one expressed. They may not wish to discuss it, but here, in the House of Commons, where they are accountable, they must discuss it. The truth is that it reveals a serious decline in the capacity, competitiveness and effectiveness of British Industry.
These problems have, at the least, been sharply accentuated, if not caused — indeed, we believe that many of them have been so caused—by Government policies, or the lack of them, towards industry since 1979. They have neglected British industry with the dire consequences which we now confront. They do not believe in Britain as a manufacturing economy. The Chancellor said in February of last year:
I am at a loss to understand the selective importance attached by the Opposition and some Tories to the manufacturing sector".
It could not have been said more clearly or plainly than that. He and his predecessors have believed that Britain could get by living on North sea oil revenues, on the expansion of service industries and on a few profitable industrial centres. That is the heresy of modern Conservatism. It is a dangerous heresy. It was

corroborated by that other famous fatuity of the Chancellor when he spoke to the International Monetary Fund on 25 September of last year and said:
Many of the jobs of the future will be in the labour-intensive service industries which are not so much low-tech as no-tech.
What a vision of the future for a Chancellor of the Exchequer to have. If he intends to staff all the fried chicken concessions from one end of the land to the other, he will have to do that by driving down the wages of young people so that they will be forced to abandon their legitimate ambitions and submit to low grade work for low grade pay.

Mrs. Elaine Kellett-Bowman: The right hon. and learned Gentleman is disparaging the extremely important job-creating and money-earning capacity of tourism, which is vital to the north west.

Mr. Smith: I have not yet said anything about tourism. I was talking about fried chicken. If the hon. Lady regards that as tourism, she needs to learn a little more before attempting to cross-question me on the subject. In fact, I regard tourism as an important sector. Its services, like those of banking and finance, are internationally tradeable. Many so-called service industries, however, are merely an exercise in taking in one another's washing and do little to increase our wealth, competitiveness or economic strength. The hon. Lady should have a word with her right hon. Friend the Chancellor about the dangerous fallacy of creating so-called service industries and forcing young people especially to accept low wages to work in them.
There is no better example of the Government's neglect of industry than the present situation at British Leyland. BL has put to the Government a corporate plan for the Austin Rover group, including a replacement for the A series engine which was originally designed in 1951 and requires replacement by a product in line with modern technology and performance expectations. I understand that those improvements are unlikely to take place because the Government regard the corporate plan as too ambitious. If BL cannot produce the replacement engine itself, it is supposed to take one from Honda. The Government claim that there is no problem and that they are simply having friendly discussions with BL, but last week a prominent BL executive resigned in disgust at the Government's reaction to the corporate plan and it is clear that the Government have no intention of supporting the development of the new engine.
Collaboration with Honda is one thing. Capitulation is quite another. BL is a vital, British-owned part of our manufacturing industry. There has been a magnificent fight-back by workers and management and it must not be prejudiced by a silly Government's refusal to support the sensible proposals in the corporate plan. I hope that the Government will soon remove that uncertainty. If they support the corporate plan and give BL the resources that all who work there believe that it deserves and which the Opposition certainly support, I shall be the first to congratulate the Government. If, however, they let slip another asset and tip Britain's remaining capacity to develop motor vehicle engines gratuitously into the hands of the Japanese, they will deserve the contempt of the House, the entire British people and especially of those who depend on that industry for their livelihood.

Mr. Robert Atkins: As the Member representing Leyland, I have as much interest in it as the right hon. and


learned Gentleman has. Will he comment on the problems faced by the truck and bus division, which is part and parcel of BL? I agree with the right hon. and learned Gentleman's comments about the difficult times that the firm has been through and the achievements of the work force in terms of productivity and facing up to the problems involved. The biggest problem for the truck and bus division, however, is the fall in exports to Third world markets caused by the recession. How does the right hon. and learned Gentleman expect the company to get out of that problem?

Mr. Smith: I was referring to the need for the Austin Rover group to update and replace the series A engine and nothing in the hon. Gentleman's comments contradicts that. If the hon. Gentleman is as interested in the future of BL as he claims, I hope that he will join the Opposition in pressing the Government to support the company and the industry properly.
There is a serious trade deficit in the motor vehicles sector. Even sadder to relate, another example is that of information technology goods. In 1984, the deficit in the information technology sector alone was £2·3 billion, following deficits of £462 million in 1982 and £800 million in 1983. The situation seems to be worsening and there is now about 54 per cent. import penetration, so the situation is desperately serious for our industry.
Information technology has the capacity to change the whole of our society, and it is of the greatest importance that we maintain our position. The trouble is that it looks as though our position is seriously deteriorating. The Ashworth report, which was prepared by the information technology economic development committee of the National Economic Development Office, told us that United Kingdom industry faces a crisis of survival. It now has such a small share of the market that it can no longer invest adequately in product development. In the graphic words of Professor Ashworth, "the so-called sunrise industry may be eclipsed before it has even risen."
This aspect is of strategic importance to the whole of British industry. If we become dependent on overseas suppliers, we shall not only lose the wealth that we could have gained if we had produced the goods ourselves but become seriously disadvantaged in other crucial respects. Inevitably, our imported equipment will lag behind the best that has been produced by the originators. The originators will be better placed to anticipate the next moves forward and to foresee more clearly and act more quickly to exploit more applications and markets. Perhaps the worst aspect of all is the fact that we shall be in the hands of others.
Lest there be any doubt about the danger, let us remember the letter that IBM sent to all those who had bought its products in the United Kingdom, reminding them of the so-called requirement to observe the law of the United States—another example of the legal imperialism to which, I am sorry to say, the United States is so wedded.
The only way in which we can protect our industry and people and safeguard our key technology is to free ourselves from such a dependence and support our industry. That would, of course, involve the Government. The Government have been involved, but only tentatively, in the support of information technology.

Mr. Edward Leigh: The right hon. and learned Gentleman has made an interesting point about world demand. Is he aware of the statistic—

Mr. Smith: I was not talking about that.

Mr. Leigh: I think that the right hon. and learned Gentleman was talking about the market for British goods.

Mr. Smith: I was not making that point.

Mr. Leigh: In that case, I shall intervene later.

Mr. Smith: As the hon. Gentleman was asking a question on an assumption that I had not articulated, I think that I was foolish to give way to him.
The Alvey programme amounts to £350 million over five years — far too small a contribution — for precompetitive research. It is only scratching at the edge of the problem. Support for the innovation programme was brought to a shuddering halt last November when it was suddenly cut. There was a five-month moratorium before the Government finally emerged from their deliberations to announce a new programme of support for innovation. The sum of £10 million has been cut from a budget that was already too small.
The Ashworth report showed that a consensus exists in the information technology industry, comprehending management, the unions and the experts, all asking for action to be taken by the Government. The only people so far to lag behind are the Government, who have refused to support the, industry in the way requested.

Mr. Phillip Oppenheim: Does it come as a great shock to the right hon. and learned Gentleman to learn that there is a consensus within the industry about the need for more Government money?

Mr. Smith: It does not come as a great shock to me. If there is a need for more research and development, for more education and training and for support to be given to industry in this country on a similar level to support in other countries, I would expect an intelligent industry to ask the Government for support. I am shocked not by the request but by the Government's response—a response which this Government appear almost uniquely to give. Our competitor countries do not take that attitude. The hon. Member for Amber Valley (Mr. Oppenheim) and his colleagues would do better to back industry rather than this rather silly Government.

Mr. Ian Lloyd: Will the right hon. and learned Gentleman give way?

Mr. Smith: This is the last time I shall give way. I have given way frequently.

Mr. Lloyd: I have been following with great fascination the arguments which the right hon. and learned Gentleman has been articulating, because they closely match those that I directed at the Labour party when it was in power. That is not to say that some of his arguments do not have some validity. The right hon. and learned Gentleman seeks to pin responsibility "uniquely" on this Government. Has he read the OECD report on the semiconductor industry which points out clearly that the main difference is between, on the one hand, the United States and Japan and, on the other, the whole of western Europe? The criticism that the right hon. and learned Gentleman is applying uniquely to the British Government


applies to the whole of western Europe and all its Governments, Conservative and Socialist alike. How does the right hon. and learned Gentleman escape from that dilemma?

Mr. Smith: The hon. Gentleman should read the Ashworth report in detail. In it unfavourable comparisons were made between the support given to industry by other OECD countries and that given by the United Kingdom. It may well be true that, regrettably, the United States and Japan are well ahead of western Europe as a whole; I would not dispute that for one moment. I am prepared to compare our performance with that of Japan and the United States and our performance with that of the EEC. Even comparing Britain's performance with that of the rest of Europe, the Government have no cause to congratulate themselves. I am sure that the hon. Member for Havant (Mr. Lloyd), who has long had an interest in these matters, agrees that the importance of information technology cannot be underestimated. It is the key to the new products and processes of the future. It is as important to the renovation of traditional industries as it is to the discovery and development of new industries, some of which may at present be beyond our imagination.
The motor vehicle industry is one of the biggest users of modern electronics. The fewer cars we make, the fewer components we sell, and so on—the process goes right down the line. We lose out at every stage. The Labour party certainly rejects a superficial distinction between sunrise and sunset industries. The crucial question to ask is whether the industries can be renewed.
The leader in The Times today says that the Labour party is wrong to attack the Government for their neglect of the new technologies. The Times says that Britain is doing quite well. Its leader writer should read the Ashworth report. He certainly does not seem to have noticed the trade deficit of £2·3 billion. He said that finance was easily available to companies in the high-tech sector, but I think that that will come as a great surprise to some of those companies that have gone under recently. It will come as even more of a surprise to those who have had to sell out to United States companies to stay in existence and to the management of Acorn which developed the BBC2 microcomputer and which, because it could not find finance in this country, was recently taken over by Olivetti. Many companies in this sector have been forced into amalgamations or forced to stop business because of the lack of suitable finance.
When companies seek to expand in the information technology sector and other sectors, they run into problems because of high unemployment. They run into labour shortages — of computer technicians, scientists and other people at all levels. This is true of a much wider range of British industry than just the IT sector. We read of the difficulties faced in finding workers, even those with traditional skills, such as fitters, welders and machinists. All this is happening in the wake of the dismantling of the industrial training boards, the destruction of the apprentice training system and the closing down of the skillcentres — all of which have been the result of Government policies. The Government cannot be surprised when those aspects of British industry that can expand seek to do so and collide immediately with labour shortages. Much of the responsibility for that lies at the Government's door.
This will go on—high unemployment together with skill shortages, poor collaboration of research and

development with poor Government support of it, missed opportunities and the colonising of our markets by our competitors—until we have an industrial strategy and resolve to plan our recovery and the regeneration of our industry. The present Government will not do that. They are wedded to non-intervention as a political principle and to market forces. Specifically in the crucial area of the Department of Trade and Industry, they avow a policy of withdrawing from the industrial scene.
I do not think that the Liberals or Social Democrats are likely to produce a different policy. They are as wedded to market forces as the Government. This is especially so of the Social Democratic party. I note that the hon. Member for Stockton, South (Mr. Wrigglesworth) is here. The leader of the Social Democrats is even more extreme than the Government in his addiction to market forces. So addicted is the right hon. Member for Plymouth, Devonport (Dr. Owen) that he has been tipped by a former director of the Institute of Directors as the next leader of the Conservative party.
Any recovery and adoption of industrial strategy must be planned. This will not happen accidentally or spontaneously. We argue that three crucial engines of that recovery must be at the heart of any intelligent industrial strategy: new policies for investment; new policies for education and training; and new policies for research and development.
We know that the City has failed to provide for the investment needs of British industry, especially at the high-technology, high-risk, end. It is difficult enough for investment to be made with the highest real interest rates in our history and with the most erratic movements in the exchange rate, to both of which Government folly has subjected us.
In too many cases the City and its institutions refused to provide adequate finance. Indeed, we suffer grievously from the lack of an industrial banking system. That is why the Labour party urges the creation of a national investment bank which can lend to industry on a time scale and on a basis which will secure the investment that our industry needs to re-equip, particularly in the new technologies—[interruption.] I think that the objections of some Conservative Members arise from the fact that they think that the City already provides adequately for the needs of British industry and that there is no need for the state to provide an institution such as the Labour party proposes.
If that is their belief, I recommend that they listen to the words of one of their colleagues in the Cabinet. I refer to a speech of the Secretary of State for Wales to Cardiff Business Club. I quote from the Financial Times of 9 March 1985 what he said about the City:
there is a prejudice, ignorance and a striking lack of awareness of what is actually happening in a fast-changing industrial world outside the narrow confines of their own experience.
He went on to say that there was a "physical chasm" between the City and Britain's industrial areas. He said:
Among many household names in the financial world, there is at best a failure to comprehend the problem"—
that seems to be a problem here as well—
and at worst a startling arrogance that leads them to conclude that all is well, that nothing calls for reform and that anyone with a good project can always find backing for it.
I think that the Secretary of State for Wales has played himself into the position of "Centre Forward" with that observation.
In research and development, the notion of Government non-involvement is particularly absurd. No one can believe that there will be any improvement in research and development in Britain unless the Government take a hand and sponsor it. It is through our universities, our polytechnics and our research institutes that we shall help the research and development that should have been going on in industry. At present it is left to market forces, and it is simply not happening. A Government who recognise that Britain needs an industrial strategy and needs to have the proper research and development which alone will find the new products and processes need to sponsor it directly and make sure that it happens.
We have magnificent inventors and scientists. Very often the innovative breakthrough in technology is made here, but for some reason the brilliant idea and the successful product are too infrequently connected. It is just not happening. Do we sit back and let it not happen, or do we set to work to make it happen?
The only way in which we shall get research and development on the scale that modern British industry needs will be for the Government to take upon themselves the responsibility to make sure that it happens. That will mean the commitment of resources and investment by the Government. I do not know why Conservative Members find that difficult to understand. It is so commonplace that it would not merit comment in Japan or in our competitor countries in Europe. They would not regard it as a startling statement to make. It is so obvious that they would wonder why it needs to be articulated.
We need a massive expansion of education and training. It was always true to say that our future depended on the skills of our people. In an age of information technology, it is even more profoundly true. Education is now a crucial part of an intelligent industrial policy. In the destruction of our apprenticeship system and the whole apparatus of industrial training, to which the Secretary of State for Trade and Industry committed himself when he was Secretary of State for Employment, the Government have done of their greatest disservices out of many to the British people. Education and training simply cannot be left to the erratic play of market forces.
The programme for investment, education and training, and research and development, will need resources and investment. Is there any alternative to what the Opposition are proposing? It is not as if the Government have not had resources in recent years. Since 1979 they have had what the previous Labour Government did not have—North sea oil revenues, now running at more than £13 billion each year. Only a fraction of that huge windfall of North sea oil revenues has been spent on industrial investment, in research and development, and in education and training. With proper investment, would not our industrial prospects have been transformed?
The money was handed to the Government on a plate when they took office. What have they done with it? They have spent every penny piece of it on paying for the cost of extra unemployment created since they came to office. That is the contrast between the Opposition and the Government. Investment must be made in the crucial areas to which I referred.
Unemployment, which is costing about £19 billion in benefits, lost income tax and other taxes, is the expensive option. Apart from the fact that it is the road to misery for

millions of our people, and a denial of opportunity to a whole generation, it is such a misshapen use of resources that it is almost obscene.
Therefore, we ask the House to support our motion, which draws attention to the neglect under which British industry has languished under this Government, manifes-ted so clearly by the disastrous trade figures of recent months and years. But we do more than that: we point the way forward to a sensible policy for the 1990s. Our fear is that Britain will enter the 1990s with an industry based on an obsolescent technology and with an unskilled work force, just at the time when North sea oil is running out, and that we shall be exposed to the full force of international competition, without the masking effect which North sea oil has had over our trade statistics. That would plainly be a disaster. The decisions have to be taken fairly soon if they are to have any effect in avoiding that catastrophe in the 1990s.
That is why the Labour party has embarked on a jobs and industry campaign to put the issues at the centre of political debate, not only in this House but throughout the country. We hope to start a national debate, and that our views will find increasing favour with the electorate. I believe that they will.
The Government deserve the censure of the House for the neglect to which they have subjected British industry. But their true reckoning will not be in the debate here today; it will be at the next general election, when, because of their record, they will be replaced.

The Minister for Information Technology (Mr. Geoffrey Pattie): I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:
'welcomes the recent substantial increase in manufacturing output, the sharp rise in exports, the major gains in the competitiveness of British industry, and the improved optimism of independent bodies such as the Confederation of British Industry; congratulates the Government on the measures it has taken to assist the recovery of British industry through its support for innovation programme, support for investment, support for exports, business and technical advisory services, assistance with education and training and in particular today's Export for Jobs seminar and the commencement of Local Enterprise Week, as well as its policies to improve the economic climate in which business operates; and regrets the Opposition's willingness to support every single strike no matter what the cost, its reactionary and damaging policies in favour of increased taxation, further nationalisation, and greater state intervention, its policies of deplorable fiscal irresponsibility, incompatible with the restraint of inflation and enhancement of competitiveness, and its eagerness to seek partisan gain at the expense of British industry and jobs.'.

An hon. Member: Speech.

Mr. Pattie: I did wonder, after hearing the length of the motion moved by the right hon. and learned Member for Monklands, East (Mr. Smith), whether he would sit down after reading it, which would have enabled me to do the same after reading the amendment, thereby giving more time for our respective Back Benchers to contribute.
The Opposition have chosen a manufacturing topic, and the right hon. and learned Gentleman was somewhat slighting in his reference to the service industries, which are extremely important. The House is aware that services in all advanced economies are taking a larger and larger share of the total national output as living standards improve and a larger share of consumers' income is spent


on services rather than physical assets. That trend will undoubtedly continue. For example, in the United States the service sector is now three times the size of the manufacturing sector.
There was a series of significant inaccuracies in the right hon. and learned Gentleman's speech. Early in his speech he said that the unemployment figure was nearly 4 million—in fact, it is 3·2 million—[HON. MEMBERS: "It is more."] I do not believe that 3·2 million is nearly 4 million, but the mathematics of the right hon. and learned Gentleman may be at variance with mine.

Mr. Alan Williams: Does the Minister recognise that when the Government took office they excluded people from the register and allowed people not to register but still obtain benefits in order to massage the figures? The real figure includes the best part of 800,000 above that admitted by the Government. It is in fact over 4 million.

Mr. Pattie: I reject that. We are talking about the actual figures for unemployment. Opposition Members are fond of making comparisons with other nations. They might be interested to know that if Germany included the people on training schemes or conscripted into the armed forces, its unemployment figure would be about 5 million.
The right hon. and learned Member for Monklands, East was wrong when he spoke about support for the innovation programme. He said that when my right hon. Friend announced the lifting of the moratorium at the end of March, the budget had been cut by £10 million. It was not. The 1985–86 budget for research and development is £297 million; the 1984–85 budget is £283 million. That is an increase, not a decrease. However, once again the right hon. and learned Gentleman's maths may be at variance with mine.

Mr. John Smith: If I am wrong, it is because I quoted from a Department of Trade and Industry press notice which said that funds allocated for the programme in 1984–85 were £308 million, and for 1985–86, £298 million. The Minister can work out for himself that that is a reduction of £10 million. If he is wrong, will he tell his press office to stop misinforming people?

Mr. Pattie: The right hon. and learned Gentleman was talking about research and development. We are quoting two sets of figures, both of which may be right. We spoke at length about British Leyland—I say that my figures are right and he says that his figures are right—

Mr. Alan Williams: Which figures are right?

Mr. Pattie: If the right hon. and learned Gentleman got his figures from a press handout from my Department, they must be right.
I was talking about the main theme of the right hon. and learned Gentleman's speech, which was research and development. I may have misheard him because he spoke at such speed. He spoke about British Leyland as though the Government had given it no support at all. He waxed lyrical about the Government wasting a great national asset. He ignored the fact that since they took office in 1979 the Government have pumped £1·34 billion into that company. I agree with him about the great efforts made by the work force and management together. However, he tried to create a wrong impression.
The right hon. and learned Gentleman spoke about the information technology trade deficit—

Mr. Barry Sheerman: What about the new engine for Leyland?

Mr. Pattie: My right hon. Friend the Secretary of State will make a statement about that.
The right hon. and learned Gentleman was selective in his figures for the information technology trade deficit. He went back to 1980 and mentioned a figure of £384 million, which was correct. In 1981 the deficit increased, as it did in 1982, and in 1983 it increased again to £2·149 billion. The figure for 1984 was 2·259 billion. It is a marginal increase, and certainly not the increase predicted by Professor Ashworth. Of course, it is a larger figure than we want, and I am not suggesting that such a deficit is desirable. I am trying to get the flavour of the right hon. and learned Gentleman's remarks. The Ashworth report has been proved to be wrong. It forecast that by now we would be heading for a £3 billion to £4 billion trade deficit, but it has actually levelled out.

Mr. Stuart Randall: Why has the House not had an opportunity fully to debate that report?

Mr. Pattie: That is not a matter for me. The hon. Gentleman will have to raise it through the usual channels.

Mr. Randall: We did, but our request was turned down.

Mr. Pattie: The hon. Gentleman knows that that is not a matter for me. He will have to raise it with his Chief Whip, who is carefully listening to the debate. He is a man of enormous influence in the House.
I used my best shorthand to try to take down what the right hon. and learned Gentleman said—that the notion of Government non-involvement in research and development was absurd. We are often pointed towards Japan and the United States, yet in Japan 74 per cent. of all research and development is carried out by private industry, not by the Government. So, at one moment we are told that all research and development must be done by the Government, and then we are told that it must all be done by industry.

Mr. John Smith: I am concerned not about the precise size of the information technology trade deficit — I accept the Minister's figures—but about the fact that, even on the Minister's information, there is a deficit in excess of £2 billion that appears to be persistent. regular and likely to be maintained, even if the figure does not rise. What do the Government say about that and about the £4 billion trade deficit in manufactured goods? What do they propose to do about it?

Mr. Pattie: The right hon. and learned Gentleman has brought me back to the figures, which I do not mind. The reason for the levelling off of the deficit has been a tremendous increase in our exports, from £4·024 billion in 1983 to £5·530 billion in 1984. When the deficit occurred, the campaign to promote awareness of information technology had been extremely successful. My predecessor initiated that campaign in 1982 and many companies decided that they would have to invest in information technology products to improve their manufacturing processes, and, therefore, their competitiveness. In all too many cases they discovered that the necessary products were not available in the United Kingdom, so they had to import them.
Much as I deplore a trade deficit in information technology or anything else, if the price of avoiding such a deficit is that our manufacturing industry does not modernise itself, I would rather that it went out and acquired the necessary equipment from wherever it was available, so that Britain's capacity in the information technology industry improved.
The increase in our exports that I have mentioned—and I will not weary the House with the figures again—means that in our view we have turned that particular corner. However, at the time when manufacturing industry became aware of the need to modernise by using equipment of this sort, it had to go out and get it from wheresoever it could.
Where we part company with the Opposition is over the conclusions that are reached about how to improve industrial performance. We do not believe that the answer lies in bringing everything under state control, either through outright nationalisation or through the encroaching tentacles of a national investment bank, about which we have heard yet again. The suggestion is that we must have a national investment bank because we obviously have an investment gap, yet, if one looks at the investment gap which is computed on the bases of gross domestic fixed capital formation, in 1981 the figure was £38·675 billion, in 1982, £40·645 billion and in 1983, £42·348 billion, which does not seem to indicate that there is any form of investment gap. What we are seeing is the doctrinal obsession of the Opposition in saying, "Right, we had better have a national investment bank." We have tried it all before—it does not work.
We do not believe that the answer lies in pumping taxpayers' money willy-nilly into industry. There is ample evidence that such policies do not work, and simply hurt the efficient. We do not believe that the answer lies in preventing overseas investment, building some kind of wall round the United Kingdom, in restricting dividends or in denigrating profit. We do not believe that protection is the answer. I would have thought that even a casual analysis of the economic performance of the world's protected economies clearly demonstrated the inevitable links between protection, lack of competition, lack of incentives, inefficiency and low growth. We certainly do not believe in taxing industry through such ingenious devices as the national insurance surcharge to restore its international competitiveness.
It is instructive to look at industry's historical development. The development of manufacturing industry is particularly well documented. Manufacturing's decline is not a recent development, as right hon. and hon. Opposition Members would have us believe. There has been a relative decline over many decades. It is not so much that manufacturing's share of total output has been falling, since that is common to many industrialised countries. There has been a very long decline in manufacturing's productivity relative to our competitors. Our share of main manufacturing countries' world exports of manufactures has declined steadily from 20 per cent. in 1955, to 15 per cent. in 1963, to 9 per cent. in 1979 and to 8 per cent. now. Slowly but surely this relative decline has turned into absolute decline.
I will again have to disillusion right hon. and hon. Opposition Members by telling them that the absolute decline did not coincide with the election of this Government in 1979. The absolute decline started in the early 1970s. The volume of manufacturing output fell 4 per cent. between its cyclical peaks in 1973 and 1978. With lower productivity than our competitors, a falling share of world trade and continual balance of payments crises, our manufacturing growth rate was only a shadow of what was achieved by other developed countries. It is to reverse this long-term decline in industrial economic performance that the Government policies are tailored.

Mr. Nigel Forman: I have listened carefully to what my hon. Friend has said about the long run decline in manufacturing. Is he about to make the point, in relation to the classification of industrial activity, that what has also happened recently is that a number of activities which previously would have been classified as manufacturing are now classified as service activities and that is partly responsible for the relationship between these two sectors?

Mr. Pattie: I am grateful to my hon. Friend. That is an important point, and he is exactly right, as always.
The analysis of our industrial decline reveals shortcomings in both price competitiveness and in a host of other factors such as quality, design, reliability and delivery, which it has become fashionable to call non-price factors. The heart of our strategy to restore industry's price competitiveness has been the reduction of inflation. That remains the heart of our strategy. Through a policy of sound money and responsible control of public expenditure, we have created a climate in which business clearly prosper and in which enterprise can flourish.

Mr. Sheerman: If the Minister is so right in that analysis, what does he say to the people living in west Yorkshire who woke up yesterday morning to find that the Philips factory—a main manufacturer of tumble dryers and washing machines, and one of the biggest producers in the country—had closed with the loss of 600 jobs? When does this fine theory about reintroducing enterprise into the country work through to real jobs in real industries?

Mr. Pattie: Obviously I sympathise with the local news that the hon. Gentleman has, because of the personal difficulties that it raises for the individuals concerned. However, I would say to him that the decision is obviously taken in the light of the competitiveness of the company, and it is precisely the factors that I have been describing that take quite a while to turn round. The point that I have been making—I hope clearly—is that nothing new has begun since 1979 in terms of this decline.
As the memory of Labour's hyperinflation fades, so the lessons of its consequences are being forgotten. But let there be no doubt that the benefits of this policy are indispensable to industrial recovery and renewed competitiveness. It is a lesson we have learnt from bitter experience as British companies have been priced out of both domestic and overseas markets by high inflation. Perpetual devaluation of the exchange rate proved to be no answer. Low inflation is the best service that we can give industry in its efforts to increase output and jobs. And yet,


as memories fade, we are once again hearing the old calls to pump money into the economy. Are our memories so short?
Higher inflation followed by higher unemployment. That is the history of the last twenty years.
Those are not my words, but those of the right hon. Member for Cardiff, South and Penarth (Mr. Callaghan).
Inflation is the mother and father of increased unemployment.
Not my words, but those of the right hon. Gentleman's predecessor, Lord Wilson of Rievaulx.
We believe that unless we keep inflation under control, all other economic objectives will fail.
Not my words, but those of the righ hon. Member for Birmingham, Sparkbrook (Mr. Hattersley).
We have achieved considerable success in the fight against inflation, but more still needs to be done. Our inflation rate is still well ahead of several of our major competitors. In the 12 months to March, prices rose by 2·5 per cent. in West Germany, by 3·7 per cent. in the United States and by only 1·6 per cent. in Japan. In particular, if industry is to continue to recover competitiveness, the rise in earnings must continue to abate. With average earnings in recent years rising by 3 per cent. a year in real terms, much of the benefit of the recovery has been taken by those in employment. Although, by historical standards, industry's unit cost increases have been moderate in recent years, they have still been well ahead of our main competitors, the United States, Germany and Japan, where unit costs have actually been falling.
There has been much discussion recently about the relationship between real wages and employment. I believe that the arguments are now well understood, but I will make one point in relation to experience in the United States which I know that right hon. and hon. Opposition Members are fond of quoting—at least, fond of quoting those bits which are selectively appealing. Between 1970 and 1980 real earnings per hour in the United States fell while employment rose by 25 per cent. Conversely, in Europe real wages continued their substantial upward rise over this period with a marked increase in unemployment. There can be no clearer lesson than that.
Responsible control of public expenditure has also allowed room to remove—

Mr. John Smith: Before the Minister leaves the question of incomes and earnings, as I think he described it, presumably the lesson that he is trying to teach people is that they should not ask for wage increases. He must be aware, as I think all hon. Members are, that the largest increase in remuneration in recent years has been in top management in industrial companies, who have voted themselves huge increases in salaries and often large capital appreciation through share option schemes. Does he have the same strictures for them as he has for the industrial worker?

Mr. Pattie: Some of the more spectacular examples have been geared to the performance of the company. If a company has performed well, that seems to be a fair response by the person with executive responsibility.

Mr. Ian Wrigglesworth: The Minister has criticised the general level of pay increases. If they are leading to an increase in inflation, a loss of jobs and a lack of competitiveness, what do the Government propose to do?

Mr. Pattie: The Government certainly do not intend to introduce an incomes policy, as proposed in the alliance amendment. We have been down the incomes policy road before. We have a policy for our employees in the sector that we can control. We shall continue to urge manufacturing industry in the private sector to keep wage increases within close limits. The consequences of not doing that are there for all to see.
Responsible control of public expenditure has also allowed room to remove or reduce other previously imposed Government costs on industry, such as the national insurance surcharge, which was costing private industry about £3 billion a year. That was introduced by the Labour Government.
When the House listens to the demands for changes in economic strategy by the Opposition parties it would do well to remember the sort of taxes that destroy industry and jobs and that are necessary to finance their pet programmes. The measures that we have taken to create conditions conducive to business and enterprise go far beyond the control of inflation. Industry cannot get on with the job if burdened with unnecessary Government regulations and controls.
Since coming to office we have abolished price controls, factory building controls, dividend controls, hire purchase controls and foreign exchange controls. We have introduced a wide range of measures over the past six years to encourage entrepreneurship, risk-taking and self-employment. Many of those measures have remedied tax disincentives to enterprise and hence to employment generation; and yet those are precisely the measures which the Opposition so mistakenly dismiss as tax benefits to the rich.
Nothing could be further from the truth. The evidence is plain to see. In 1983 the net increase in the number of firms starting up over those going out of business was over 42,000—the highest figure on record and double the level for 1982. Altogether, in the four years from 1980, the net increase in new businesses was 112,000, which means that net starts were averaging over 500 a week during this period. The numbers of self-employed are at record levels.
Industry now is much more capable of competing on price; but while that is an essential prerequisite for improved performance, the so-called non-price factors are more intractable. Unfortunately, the Government cannot legislate for improvements in performance. Much of the task must lie in industry's own hands. It is firms, the producers, which must adopt efficient production methods and working practices. It is firms which must research markets to discover customers' requirements. It is films which must design products to customers' specifications and adapt to change, and it is firms which must adopt the new technologies.
However, the Government accept that they have a vital role to play in the transformation that is needed to regain international competitiveness. One area vital to future competitiveness is research and development and innovation. Science and technology is central to wealth and job creation. I stress that innovation and adoption of the new technologies are as essential in the traditional as in the more modern high technology industries.

Mr. Laurie Pavitt: Will the Minister consider the innovation in my constituency? A famous food firm, Heinz, which makes baked beans, has had to


bring machinery from Switzerland because of the rundown in high-grade technology equipment production in Britain. The material that the firm requires for innovation cannot be found here. Surely public investment would have cut the need for tremendous import charges and perhaps prevented the 600 redundancies in an area where unemployment has quadrupled in the past five years.

Mr. Pattie: That is yet another tragic example for the people involved of what happens as a result of inadequate investment. The hon. Gentleman makes a false analysis because public investment is not involved. The hon. Gentleman suggests that Government money can force companies to produce certain products. There is no evidence of that.
I stress again that innovation and adoption of the new technologies are as essential in the traditional industries as they are in the more modern and high technology industries. Innovative exploitation of science and technology provide the driving force for internationally competitive products.
Technology is now an essential ingredient of improved product performance, quality and reliability. We cannot afford to stand still because we can be sure that our competitors will not. Yet industry has not devoted sufficient resources to this vital area.
I am glad to say that I believe we are now making progress. The revival in profitability has brought with it increased industrial interest in R and D and innovation. An arousal of interest has been fostered by the Department of Trade and Industry's assistance to innovation and the adoption of new technologies. This is an area where the Government have been very active, to match the speed of progress in the new technologies themselves. Since 1978 we have more than doubled in real terms our financial assistance for innovation to over £300 million a year.
Under the last Labour Administration, the maximum scientific and technological assistance provided by the Department of Industry in any one year was £139 million in 1980 prices. This is less than that for any year under the present Government, and less than half that of £294 million at 1980 prices for 1984–85.
One of the main aims of the Department has been the promotion of innovation. We have done this by increasing awareness, and by encouraging and assisting where it is appropriate to do so. Our record has been impressive. Since 1979 we have quadrupled expenditure in support of industrial R and D, innovation and technology transfer.
We keep our policies under review to ensure efficient use of funds and value for money. Since the launch of the support for innovation programme the Department has offered nearly £400 million to more than 3,100 projects. The number of applications dealt with by the Department under this Administration grew rapidly. In the last year of the Labour Government the Department handled some 400 applications for this form of assistance. By 1981–82 the number had more than doubled. In 1982–83 it reached 1,500 and in 1983–84 2,500 — I am talking of actual cases of people receiving assistance.
There are many elements of our support for innovation promotion. Following my review of the Department's general industrial support for R and D which was occasioned by the very rapid growth of applications, there will be some changes of emphasis in the direction of

assistance. The House will be aware of some of them. A larger proportion of assistance will be devoted to advisory services, to encouraging best practice, to improving the supply of key skills and to collaborative research. Support in these areas should help to improve the capacity of a wide range of companies to exploit technological opportunities.
Correspondingly, a smaller proportion of assistance will be devoted to near-market project support, which can now be more readily financed by industry with the increase in profits and liquidity in the past few years. Our aim will be to concentrate project support on innovative projects which represent a significant advance for the industry or sector concerned, taking into account the degree of innovation, the degree of technical and commercial risk involved, the potential for market exploitation, and any wider industrial benefits. Within these general arrangements for project support we will continue to emphasise certain key technologies and their application, such as microelectronics, fibre optics and computer software.
The Department's assistance to encourage the application in industry of microelectronics has achieved substantial success. In 1977 only 5 per cent. of manufacturing firms were using, or planning to use, microelectronics in their products or processes. By 1981 that figure had risen to 30 per cent. and by last year it had reached 50 per cent.
Another area where we have achieved considerable success is advanced manufacturing technology. Success in manufacturing results from the transformation of good design into high quality products through efficient manufacture. The three elements are inseparable and mutually dependent. Yet for too long production has been the poor relation of manufacturing industry. In many firms production strategy was rarely considered important enough to merit board room consideration.

Dr. Jeremy Bray: If the Government's policies in the promotion of research and development in manufacturing industry have been so successful, will the Minister explain why actual expenditure at 1975 prices fell from £1,512 million in 1978 to £1,465 million in 1983?

Mr. Pattie: Is the hon. Gentleman talking about all research and development?

Dr. Bray: I am talking about intramural research and development expenditure in the whole of manufacturing industry, financed from whatever source, including private as well as Government finance.

Mr. Pattie: According to the figures that I have, taking 1975 as the base year, expenditure was £1,340 million in that year. In 1983 it was £1,564 million and in 1981 it was £1,661 million. We reckon, on the basis of the high increase — [HON. MEMBERS: "But there has been a reduction."' Indeed — I have just given the figures. However, judging by the applications that we have had for the SFI programme, the 1984 figures will be up on those for 1983.
Our support for advanced manufacturing technology began with the robot support programme, launched in 1981. That was followed by CADCAM — computer-aided design and manufacture. Later we expanded to embrace computer-aided production management and


flexible manufacturing systems. Through all those programmes we have already laid a firm foundation of user experience.
To date there have been over 200 consultancy, development and installation projects under the robot support scheme. I was at the robot exhibition in Birmingham yesterday, and met representatives of a company called Unimation which, with Government assistance, has seen its work force grow by 30 per cent. and production space increase by 500 per cent. In the past 12 months, more than 300 robot technicians have been trained at that company's facility. It has also sold over 500 of a product called the Puma 560 robot, which has been developed with Government assistance. It is worth noting that 98 per cent. of the product is of United Kingdom origin.
Over 250 companies have been assisted in the development and installation of robots in a wide range of industries from aviation to pharmaceuticals. Under the CADCAM programme about 9,000 companies have made use of the wide range of facilities and services that have been offered. Under the flexible manufacturing systems scheme assistance has been offered for 114 planning studies and 43 installation projects, representing an industrial investment of more than £111 million.
The Government's help to industry, to enable it to keep abreast of the very rapid changes in technology, is very wide ranging. Design is a key factor influencing the market success of our manufacturing and service industries. We have been acting vigorously and creatively ever since the Prime Minister's influential seminar on design in January 1982.
With the help of the Design Council we ran a countrywide series of seminars in 1983 with 1,500 senior people from industry. We set up a funded consultancy scheme, which is producing excellent results for 2,500 small and medium-sized firms that have used it: 1,000 firms are expected to receive consultancies this year. We are assisting a number of bodies in the educational and training aspects of design.
In addition to the schemes that I have just mentioned, my Department has been active in encouraging biotechnology, fibre optics and optoelectronics in industry; in the development of software products and telecommunications products; in collaborative research under the Alvey programme on VLSI—very large-scale integrated circuits — software engineering, intelligent knowledge-based systems, man-machine interface and infrastructure and communications.

Mr. Spencer Batiste: Does my hon. Friend agree that if our computer and software industry is to continue to build upon the successes that it has already achieved, it is important that when the details of the British COCOM licence are established in June there should be as few restrictions as possible on our software industry, and as little red tape as possible to prohibit commercial activities?

Mr. Pattie: I agree with my hon. Friend. That must be the aim.
The Government are providing £200 million over five years to this major initiative to keep Britain at the forefront of information technology. It is highly encouraging that a programme only two years old has now approved 100 projects involving 50 companies, 40 academic bodies and

five research institutions. I am confident that we can all expect substantial and exciting results from that enormous collaborative effort. There is also a wide range of advisory and consultancy services covering quality assurance, design, manufacturing efficiency, small firms and technical assistance.
One point needs particular emphasis. If we are to compete with the United States and Japan, our approach to the new technologies and innovation must not he purely national. The new technologies need the potential of a community market of 270 million people—soon to he 320 million. That is why we have taken the lead in pressing for practical measures towards an integrated market for the new technologies, as well as for more familiar goods and services. I am glad to say that the support that we have given to developing standards through the Community for telecommunications and information technology is beginning to bear real fruit. The first step to liberalise public procurement in telecommun-ications has been taken. The Community is on the point of coming to grips with developing standards for advanced manufacturing technology. The Government can, have, and will continue to make a contribution to creating a community framework in which enterprise can flourish.
But it is industry itself that must exploit these opportunities. The ESPRIT programme, partly funded from the Community budget, shows how co-operation can work in practice. There are encouraging examples of industry initiatives — the links between Plessey and Elettronica, and between Racal and Selenia, for instance. There is also the arrangement between Bull, Siemens and International Computers Ltd., and between Plessey, Siemens, Alcatel and Italtel. The spread of such industry-led collaboration can only be to our advantage. Support for the new technologies and their adoption across industry is not, however, sufficient in itself. The new technologies emphasise the crucial importance to industry of a highly qualified and skilled work force. In the information technology sector—the fastest growing industrial sector worldwide—there has been concern that shortages of skilled manpower were leading to a lower growth rate for the United Kingdom industry compared with our competitors. We therefore set up a committee last year, under the chairmanship of my hon. Friend the Parliamentary Under-Secretary of State, to study the situation as a matter of urgency and to propose action to deal with identified problems. This IT skills shortages committee includes representatives from industry and the education sector as well as from Government Departments.
The committee's first report, published in July last year and focusing on shortages of graduates, and its second, issued in January and dealing with technicians, both stressed the importance of forging a partnership between industry and the education system. Only industry is in a position to define its skills requirements and to explain them to those who provide education and training; they in turn should respond flexibly and rapidly to industry's needs.
Industry has already committed itself to contributing finance, teaching manpower and equipment to carry forward that concept. In addition, it has set up the IT skills agency under the auspices of the CBI education foundation to co-ordinate industry's contributions to the partnership. That is a welcome and imaginative response by industry to solving the problems of IT skills shortages.
For their part, the Government have responded to the requests from industry for more graduates in engineering and technology. The Government are making £43 million available over the next three years to provide additional places for engineering and technology students in higher industrial institutions. Several Departments, including my own, the Department of Trade and Industry, are contributing to the cost. That follows on from earlier moves, such as the information technology initiative taken in 1982, which is adding 5,000 extra places in IT-related higher education, and the £14 million engineering and technology programme in Scotland announced in November 1984.
In 1978 the Department estimated that each year in the United Kingdom there were only about 2,500 short course places available for updating engineers in microelectronics techniques. Studies suggested that that would be insufficient to meet the needs of industry if it were to adopt the technology as fast as the Government hoped. Skill shortage was likely seriously to inhibit take-up of the technology. Consequently grants for developing training courses became an integral part of the microelectronics applications programme. They go to colleges, univer-sities, polytechnics and firms to develop courses on microelectronics for industrial engineers and managers. More than 30,000 such course places are now available annually compared with 2,500 short course places when the Labour Government were in office.
Therefore, the Government have a coherent and well developed policy for industry, manufacturing and the new technologies. It is not a policy to preserve every firm—

Mr. Paddy Ashdown: I have listened to the Minister's speech with care, hoping to detect some spark of a realisation of the country's position. The hon. Gentleman has made careful use of figures. May I present him with four more? Has not output in manufacturing industry fallen by nearly a tenth since 1979? Has not output in production industry, despite the oil surge, fallen by nearly a twentieth? Has not investment in manufacturing fallen by nearly a third? Is not the non-oil trade deficit now at a level of nearly £12 billion? In the face of such figures, how can the Minister be so complacent?

Mr. Pattie: If he catches your eye, Mr. Deputy Speaker, the hon. Gentleman will no doubt develop the points that he has just made in what was virtually a speech. No doubt he too will welcome my right hon. Friend's reply to the debate.
Our policy is to create the conditions in which manufacturing and industry as a whole can flourish, to encourage and assist it to adapt and to be competitive, and to allow it to use its resources and strengths unhindered by Government restrictions wherever possible.
The policy is clearly working, because since early 1981, the trough of the world recession, the economy in the United Kingdom has grown steadily for four years. Total output is now at an all-time peak, not just in money terms but in real terms. It is some 4 per cent. above its previous peak in 1979.
Total fixed investment and total business investment are at real peak levels. Employment is responding, with over 600,000 more people employed now than in the spring of 1983, and buoyant growth is continuing. All the

forecasters predict continued growth throughout 1985 of up to 4 per cent., following the end of the miners' strike. We are expected to have the highest growth rate in Europe this year for the second time in three years. But for the miners' strike, it would have been three out of three.
Encouragingly, growth is widely based, with manufacturing industry sharing fully in the recovery. Since the first quarter of 1981, the trough of the manufacturing recession, manufacturing output has grown by some 10·.5 per cent. As with total output, manufacturing is entering its fifth year of successive sustained growth. Manufacturing investment is rising strongly again—up 13 per cent. last year.
There is, as the Labour party keeps telling us—and it is right—some way to go before we achieve the volume of output of the previous cyclical peak in 1979. That is a point that the hon. Member for Yeovil (Mr. Ashdown) has continually in mind in his interventions. But there are no signs, despite the doomsters' prophecies of last year, that the upturn in manufacturing is petering out. Although some hon. Gentlemen may discount it on the radio, and say that it is merely a flash in the pan, the latest CBI industrial trends survey is even more optimistic than the many buoyant surveys over recent years.
The survey shows a significant improvement in business confidence and expectations of future output growth that are better than at any time in the last two years. Most encouragingly, the steep long-term downward trend in manufacturing employment seems to have ended, with employment expected to be broadly stable over coming months.
Export confidence and orders are particularly strong. Indeed, one very encouraging aspect of the recovery in manufacturing has been the improvement in export performance. Since the end of 1983 manufactured exports have been rising strongly, and by the end of 1984 they were surging ahead. This surge has continued in the first quarter of this year. Export volumes of manufactures, excluding erratic items, are up 14 per cent. compared with the same period a year ago. We are now exporting more manufactured goods in real terms than ever before in our history. Export volumes are running at over 10 per cent. above their previous peak level.
As in all recoveries, some sectors within manufacturing have done better than others. Not all have grown; nor would we expect them to in a dynamic and rapidly changing market place. However, the growth of some manufacturing sectors has been dramatic. Output of office machinery, including electronic data processing equipment, has risen by a remarkable 170 per cent. since the first quarter of 1981, the trough of the manufacturing recession. Electronic consumer goods output has grown by 53 per cent., electronic industrial goods by 30 per cent. and electrical consumer goods by 22 per cent.
Rapid growth has not been confined to the so-called high-tech industries. The established industries have also participated, particularly chemicals. Agricultural chemicals output is up 27 per cent. on the first quarter of 1981, plastic products by 35 per cent., pharmaceutical and consumer chemicals by 21 per cent. and industrial chemicals by 24 per cent. All those sectors are now producing at record real levels of output.
We accept that much remains to be done. We must not slacken our efforts and jeopardise the substantial progress that has been achieved over the past four years. These achievements have laid the foundations for a competitive


manufacturing and industrial sector. Productivity in manufacturing has risen by an average 6·5 per cent. a year for the past four years, well above the rates of our main industrial competitors, and there has been a much-needed rise in profitability. Profits of industrial and commercial companies rose by over 20 per cent. in 1984 and the real rate of return is expected to have been around 7 per cent. in 1984 for non-North sea industrial and commercial companies.
The opportunities are now there to be grasped. The rewards of success will be high both for industry itself and for the nation. It is very heartening to see industry responding to the challenge and the opportunities. For our part, I can assure the House that the Government will continue with their policies to facilitate and encourage a dynamic, adaptive and efficient manufacturing and industrial sector. I urge the House to support our amendment.

Mr. Tony Benn: I do not need to repeat the points made by my right hon. and learned Friend the Member for Monklands East (Mr. Smith) in chronicling what has happened to British industry in the six years since the Government came to office. The Minister sounded like a managing director in a difficult year. I congratulate his officials on writing the brief, though not the hon. Gentleman on reading it. At no point did he touch on the major tragedy that has occurred in Britain as a result of the destruction of so much of our manufacturing industry.
Two hon. Members intervened to say a word about individual closures such as we could all cite. The Minister said, "That is tragic, but․" The truth is that whole areas of the country have been laid desolate. Anyone who sees what has happened in Liverpool is reminded of Beirut. We should remember the destruction of industry, the high unemployment and the hopelessness of young people. In the mining areas, if the closures go ahead, there will be the same desolation in south Wales and in the north-east. The Minister failed to allude, except in passing, to what has happened to basic industries, such as those which other countries have invested in and developed, or to the human tragedy.
The police are now being asked to prepare themselves by increasing their numbers and improving their equipment to deal with the social disaffection that inevitably follows the implications and implementation of the Government's policies. I wonder how many people who are unemployed or face other problems, reading the Minister's speech, will feel that they are living in the same country as the hon. Gentleman.
People are now realising—this explains some of the changes in the Conservative party, to which I shall refer —that the Government are not pursuing an economic policy. I do not believe that the Government are monetarist. I do not believe that they are Thatcherite. I do not believe that the Government are wilful—despite the words of our motion — or incompetent. They are following a deliberate policy of hammering those whom, broadly speaking, the Labour party, of which I am proud to be a member, seeks to represent.
The Government are hammering young people. Young working-class unemployed people are being put through a youth training scheme that is an absolute fraud. The scheme provides free labour for the employers. We are told that the Government cannot intervene in industry, but

the Government give thousands of young people to employers, without charging them a penny, and call it training. Many of the young people receive no proper training at all. They are not protected for health and safety purposes. They are substitutes for adult labour.

Mr. Robert Atkins: rose —

Mr. Benn: I shall not give way to the hon. Gentleman. Experience shows that his interventions are not related to the argument.
The youth training scheme involves giving free labour to employers; it is designed to get wages down and to get people accustomed to low wages. In many cases it replaces apprenticeships, does not come under the protection of the trade union movement and is a substitute for adult labour.
That low wage policy was enshrined in the Budget. The Chancellor said to employers, "If you pay low wages, you will pay lower national insurance." Just the other day I met someone on a train who works in a hairdresser's shop. She has suffered a cut in wages since the Budget, because the employer said, "By cutting your wages, I shall be able to pay less national insurance." That girl could not find another job because of high unemployment in the area in which she lives. The abolition of the wages councils and the ending of shopping restrictions, which we shall discuss on Monday, are designed to create a low wage economy, and that means mass unemployment.

Mr. Leigh: rose —

Mr. Benn: I shall not give way as I want to be brief. When I have made my point, other hon. Members can follow it up.
The Secretary of State for Trade and Industry is famous for his phrase, "On yer bike." He got it wrong, because he meant, "On yer knees." His intention was to create mass unemployment, which is the real economic policy that the Government are following. Unemployment keeps real wages down, and, when assisted by Government measures, lowers real wages. If one lowers real wages, one boosts profits, and the employers do not necessarily plough such profits back into the industries in which they are made.
I asked the Library to undertake a corner shop economics calculation to determine the export of capital per head of population. That shows that £1,097 of capital per head has been exported since the Government came to power. Therefore, if people tighten their belts in response to Government pleas and employers make larger profits, such profits are exported to places where wages are lower.
Unemployment not only boosts profits and lowers wages; it also undermines the strength of trade unions. It is a marvellous form of import control, because person out of work does not buy Japanese videos, French cars or American tobacco, and all this has nothing whatever to do with the argument advanced by the Cabinet.

Viscount Cranborne: rose —

Mr. Benn: I am seeking to keep within the 10-minute limitation on speeches. I shall be able to do so only if there are no interventions.
If full employment were to return, the Government's whole strategy would be undermined because the unions would be stronger, wages and conditions would be improved and there would be a demand that the dole money saved should be channelled into health and education.
When people read this debate in Hansard, I suspect that they will perceive my comments to be more relevant than those of the Minister. If the Government continue to pursue their present policy — I think that I share this view with certain Conservative Members—we shall see the destruction of the Tory party at the next election. We were told that Conservative policy would result in a strengthened economy—coming phoenix like out of the ashes—but the one that is now pursued will create such a powerful public reaction that the Government will never be re-elected. Lest anyone be in any doubt, I need only say that the Government's prospects have changed sharply since the end of the miners' strike, and that their brutality towards the miners has resulted in a powerful counter-reaction.
The second alternative which is occasionally put forward by the right hon. Member for Old Bexley and Sidcup (Mr. Heath) and the Centre Forward group is to return to the policies of the last 40 years. That is advocated by Mr. Peter Jenkins in The Sunday Times, who I was told was paid a transfer fee of £115,000 to join that newspaper. The idea is to go back to what were essentially SDP-type policies, which were followed by the previous Conservative Government as well as the Labour Government of which I was a member. It is argued that that will solve the problem.
Incomes policy is at the heart of that approach. We now have an incomes policy which is known as unemployment, yet the Liberal party and others favour an incomes policy as an alternative to monetarism. Having served in Cabinet for 11 years, I know what incomes policy means —centralised wage bargaining in the hands of Ministers.

Mr. Wrigglesworth: No.

Mr. Benn: Of course it does. I do not think that the hon. Gentleman has ever been involved in ministerial discussions, where one talks about who will get an increase and the use of Government sanctions if there is disagreement. An incomes policy runs absolutely counter to everything that the alliance says about not having statism. It is the most statist policy that one can have. If, in addition, we adopted the European monetary system, under which we would join a federal Europe, we would lose control of our currency. Therefore, if we were to adopt the proposals advanced by the Liberal party, we would have the most authoritarian form of central Government control possible.
I can understand why some Conservative Members want to follow that policy. They believe—I think that they are right—that the present Prime Minister will be the first woman but the last Conservative Prime Minister this century. They think that the party can be salvaged by returning to the patrician ingredient of certain noble politicians who became Prime Minister. They also think that prospects can be improved by returning to the absolutely rigid, bureaucratic centralism of the previous Conservative leader. I must be candid and admit that much of it was followed through by the Wilson Government.
Neither of those policies can work. The policies of earlier years contributed to the decline that we have witnessed. The policies pursued by the present Government have catapulted that decline into such acute decay that, when the oil runs out, this country will be faced with mass unemployment and mass emigration, with

nothing but a little bit of tourism to keep us going. That will not worry business, because by then it will have invested its money in other countries where it can achieve a sufficient return, whether or not there is manufacturing in Britain.
My mind goes back to the period which confronted us after the war. I am one of the five Back-Bench survivors of the Attlee Government, and I vividly remember the task assumed by Mr. Attlee when he came to power in 1945. At that time our industry had been neglected because we concentrated on the war, but at least there were 3 million or 4 million service men ready to be demobilised so that those industries could work again.
The damage that the present Prime Minister has done to British industry is far greater than that achieved by the German bombers, because our industry is now gone. There is no industry. Equipment has been sold abroad, much of it with Government money. Industry will not exist. Instead of 3 million or 4 million service. men waiting to be demobilised, we shall have 4 million demoralised unemployed, many without a skill because of the cuts in the education and training provision which is so necessary for high technology industry.
The policies supported by the alliance, which began in 1940 under Churchill and ended in 1979, are not adequate. Nor is the alternative economic strategy which was initially advocated by me in 1974. I have little doubt that the electorate will reject the present Government, but the Prime Minister may be hard to move, even with the help of her former colleagues.
We shall have to plan much more carefully. We shall have to ensure that the export of capital stops. We will have to plan our trade to prevent industries from being destroyed as we rebuild them.
We will have to assume far greater responsibility for the banking and financial institutions—if the Prime Minister has not nationalised them before we get there, as Mussolini did when faced with the collapse of the financial institutions in Italy in the 1920s. Anyone who thinks that the world banking structure is altogether safe may be living in a dream world. It is normal to laugh at people who carry out their function to warn that what will be required is a radical policy and more than just a little reflation, a little more public expenditure, a little adjustment to the PSBR or appeals for higher productivity.
The country has been ruined by this Government, and it will have to be rebuilt by another Government using methods of planning comparable to those that are necessary to win a war. These arguments are penetrating to the public and will be understood. I do not think that the Government are following an economic policy. It is a political policy for the destruction of working people, their services, their jobs, their unions and their ballot box. The country will not be saved by a lot of consensus politicians trying to revitalise the policies which were tried by honest men and women but which failed.
We will have to rebuild. It will require an effort of will, a sense of purpose and instruments for planning and greater democratic involvement than we have yet contemplated in this Chamber. That is the point that I want to make in the debate.

Mr. James Prior: I am glad that the right hon. Member for Chesterfield (Mr. Berm) made that speech. It has made me feel much more comfortable sitting


on these Benches. The people who feel uncomfortable because of the right hon. Gentleman's speech are those on the Opposition Benches.
One of the sad things for the right hon. Gentleman is that there was a time when he could fill the Chamber when he made a speech. Now he is isolated and neglected even by his former friends. That gives some idea of how utterly barmy his views have become. There is no other word that one could use because he is so far removed from the politics of the present, let alone the industrial circumstances of today, as to make himself rather a sad character. He, like me, does not speak often in the House. When he speaks, he thinks he has to bring in everything. We have listened to the whole range of political and industrial matters in a quarter of an hour. He does his party and his own record an enourmous disservice by the sort of speech he has just made.

Mr. Benn: Can the right hon. Gentleman tell me from his own long experience how to be influential with his own leader?

Mr. Prior: I did not catch all that the right hon. Gentleman said, but I cannot believe that he will be influential—I hope he will not be—with his leader with the sort of views that he has put forward today, although I fear he may be.
I want to describe briefly what it is like when one moves from Government to the Back Benches and perhaps from Government to industry, and what Goverment begins to look like from the point of view of someone who has moved into industry.

Mr. Dennis Skinner: The right hon. Gentleman has four jobs already.

Mr. Prior: A few years ago I made the great mistake of saying that the hon. Member for Bolsover (Mr. Skinner) was the Brian Clough of the House of Commons. I now know what an insult that was to Brian Clough. I have been longing to tell the hon. Gentleman that.
Manufacturing industry is absolutely vital to the future of this country. I do not believe that we can have a prosperous service industry unless we have a strong manufacturing industry behind it. That is a very important lesson that we have to take on board.
We have not measured up yet to the problems of international trade and the enormous competition there is now in overseas markets, particularly for major capital projects. Such projects can be won only by large British companies which will use as subcontractors the small and medium-sized companies which help to make up the British economy. When a large British company gets a major contract, about 30 per cent. of the work will go to that company and 70 per cent. will go to a range of smaller companies. We need large British companies of an international scale if we are to compete with large companies elsewhere.
We look upon ICI as a large company, but in terms of the chemical industry there are four or five world companies that are larger than ICI. My own company, GEC, in which I declare my interest, is regarded here as a very large electrical company, but there are six or seven electrical companies throughout the world that are far bigger. General Electric in the United States is twice as big, as is Siemens.
Many companies with which we have to compete in overseas markets are bigger than British companies.

Therefore, the important lesson for us all to learn is not so much that we need to make certain that there is competition within companies in Britain but that we must compete with international companies which are far stronger than most British companies.
If we are to do that successfully in the great world markets, we must compete on equal terms. I went on the Young mission to China. One of the messages from that visit was that France, Japan and other countries are granting long-term cheap credit. The French were commonly reputed to be giving 30-year credit at 3 per cent. We know what the Japanese have been doing all round the world. Many other countries have been doing the same. If we cannot compete with those countries, we are not in a position to do business.
The Secretary of State must run trade policy and must be our champion on trade policy. That means that we have to take a different attitude towards aid and soft credit, aid and trade provision in particular and bilateral aid.
In 1983 our bilateral aid was $850 million. In France, one of our main competitors, the comparable figure was $3,145 million. Again, our ATP budget has been about £66 million but we have only once in the last five years come up to our budget.
One of the best ways that we can help manufacturing industry and, therefore, our overall level of employment and prosperity is by ensuring that we get a fair share of overseas contracts. There again from my experience in government I think that the Treasury have far too much control over the Export Credits Guarantee Department and over ATP. The Secretary of State for Trade and Industry has nothing like enough control.
Much nonsense has been circulated. The Byatt report contained the shibboleth that there was no follow-through business when a great contract was obtained. That is utter nonsense. It has been refuted by an unpublished NEDO report, which I hope will be published shortly. The NEDO report makes it plain that there is a great follow-through from the obtaining of large contracts overseas. If we obtain a contract for an airport, a railway, a signalling system or a telecommunications system, we are likely to be called upon to provide spares and there will be further work for many years to come.
I do not say that manufacturing industry will employ much more labour, but it will employ much less unless we get things right. If we provide it with the right conditions, manufacturing industry will create prosperity for service industry, where growth in employment is probable and where it must come.

Mr. David Crouch: As I think the House knows, I, too, have an interest in the chemical industry. Contractors are attempting to secure contracts to build large chemical plants abroad. On average, these contracts are worth £50 million to £100 million. The contractors are being required by ECGD to pay premiums for tender-to-contract cover which are almost prohibitive. Sometimes a contractor will have four or five tenders out at one time and will have put down about £500,000, which will be lost if the company does not obtain the contracts. This is an example of Government intervention being unhelpful rather than helpful.

Mr. Prior: I agree with my hon. Friend. My right hon. Friend the Secretary of State is listening carefully to the views that are being expressed by his right hon. and hon.


Friends. A fresh assessment must be made of ATP and our bilateral aid. We need mixed credit and soft loans. We do not need to give 100 per cent. grants. A much smaller grant and a greater spread of the money would achieve a great deal more.
I urge my right hon. Friend to bully the Treasury and the ODA so that he gets his way and they do not get theirs. Over the years, the Treasury has been allowed to obfuscate what we wish to do, and that should be stopped. The Secretary of State should take charge and the Treasury should not be allowed to examine every individual contract in the way that it has been doing in recent years. I hope that some of the frustrations that have built up over the past few years can be removed. There is nothing more frustrating when a company goes to enormous efforts to win a large contract and finds that the problems of getting ECGD cover, or ATP, have delayed the decision so long that the contract goes elsewhere although it could have come to the United Kingdom.
The provision of the appropriate machinery to assist companies to win large contracts is much more important than research and development. The Opposition are wrong to concentrate their attack on the need for greater investment in research and development. There is no real shortage of research and development effort. We are short of the money to market and to sell our goods. That is much more important than R and D.

Dr. Bray: Will the right hon. Gentleman explain why his own company, GEC, has doubled its research and development expenditure over the past four years?

Mr. Prior: That is our money. We put a vast amount of money into research and development, but it is our money. We research and develop the goods that we think we shall be able to sell. That is a decision that should be left to the company. It is much more important that the Government should help with the selling of goods in overseas markets where we meet intense competition rather than on the research and development side, where we can manage matters for ourselves to a much greater extent.

Viscount Cranborne: I have lived and worked abroad and I have had the experience of working for a foreign company. Most of what my right hon. Friend has said about the lack of support from the ECGD and the other Government agencies is true, but does he accept that time and again good British investment and good British products are frustrated by poor salesmanship? We often see 40 Japanese selling over three years while one British agent is working part time in selling a large product. Is it not true that British industry could put much more energy into its sales efforts in supplementing any soft loans that might be available?

Mr. Prior: I do not doubt that that is right. I am not defending British industry and all that it does. There is a great deal wrong with British industry and there is a great deal that needs to be put right. British industry is constantly trying to improve, and there have been remarkable improvements in the past few years. However, many of the goods that we sell abroad still do not come up to standard. There are shoddy goods that are not delivered on time or are not of the right design. I

acknowledge that we have a great deal more to do. I do not believe that it is lack of research and development that holds Britain back. The greatest problem lies in the large infrastructure capital goods market overseas.

The Secretary of State for Trade and Industry (Mr. Norman Tebbit): My right hon. Friend will understand that I do not want to pick a quarrel with him on what he has said, but I think that he should take into account the fact that in 1979–80 the ECGD had a cash inflow of £50 million and that last year there was a cash outflow of about £470 million. It is clear that ECGD and the taxpayer are carrying a heavy load. I emphasise that they are cash flows one way and the other, but they are very considerable sums of money.

Mr. Prior: I am not as critical of ECGD as I am of the Government over ATP and on bilateral aid. I think that the ECGD needs to respond more quickly. I was more critical of the Byatt report and the attitude of the Treasury towards the ECGD, but I was concentrating my fire elsewhere.
I want to turn to purchasing policy, whether it be public purchasing policy or that of large industry in Britain, whether it be nationalised or a private monopoly. I believe we shall not have a great export market unless we have a strong home base. I am worried that not enough account is being taken by some of our large consumer industries at home of the need to help British manufacturing industry in what the overseas markets require.
My firm has a great interest in the telecommunications industry. The automatic exclusion of 20 per cent. of the home market by British Telecom—this has been given to Ericsson—will result in a loss to GEC and Plessey of about 3,000 direct jobs and a further 2,000 to subcontractors. The effect of giving 20 per cent. to Ericsson will be to create a few hundred extra jobs in this country, but it will do nothing to help technology because all of the research and development and all of the training will be carried out in Sweden. This makes it much more difficult for Britain to sell its exports because it will be said, "Your own telecommunications industry is not buying your products." We shall have less ability in research and development for new systems because we shall not have the necessary money, and reduced ability, especially in information technology, which is at the core of British industry.
The answer must be for the Government to do all that they can, by means of their purchasing policy and the influence that they can bring to bear upon others, to ensure that large consumers in-Britain buy British goods and give support to British industry wherever they can. That applies also to competition. The breaking down of trade barriers and our membership of the European Community is bound to lead to greater competition between companies throughout the world. There will then be less room for the kind of competition between companies in this country that we thought was necessary until a few years ago.

Mr. Phillip Oppenheim: My right hon. Friend has drawn to the attention of the House the fact that British Telecom proposes to buy 20 per cent. of its digital exchanges from Ericsson. Jobs will be created in Britain through the assembly of those exchanges, but I suspect that they will be few in number. Is not the situation made worse by the fact that the Swedish PTT totally refuses to countenance the purchase of any British equipment to the


extent that last year the Swedes exported £22·9 million worth of telecommunications equipment to Britain, while we in return were able to export only a derisory amount?

Mr. Prior: My hon. Friend helps me with my point. These matters need to be considered very carefully. We can do certain things to help ourselves without extra finance being involved.
One can argue about the base year which ought to be adopted for the output of manufacturing industry. Should one take 1973, 1979 or 1981 and work out from that how well or how badly one has been doing? Although Britain's manufacturing performance has improved remarkably during the past few years, it faces enormous problems. I should not want the Government to think that their efforts during the last three or four years or that the growth in manufacturing output during that period will carry Britain through when North sea oil begins to run out. We have to use this period to ensure that British industry becomes as competitive as possible. That is why I urge my right hon. Friend the Secretary of State for Trade and Industry to fight very hard in Cabinet for a change in the bilateral aid policy, in the aid and trade provision, and in the attitude of the Treasury. The "crawling over" of these figures that goes on time and time again delays decisions and frustrates so much of British industry.
Vast numbers of British industrialists want to support the Government. They believe that the Government's industrial relations policy has resulted in the tightening up of manufacturing production generally. They want to continue to support the Government. They believe, as I do, that the time has come to look again at some of our overseas trade policies.
When the Prime Minister was in Indonesia during her tour of the far east, which she regarded as a market into which Britain ought to be getting in a big way, she found that we were almost totally excluded from Indonesia because we are unable to match the soft credit and other packages which other countries are able to supply to that market. Yet it, together with China, is one of the most important markets that we ought to be developing during the next few years.
Contrary to what has been said, when she goes overseas the Prime Minister does a remarkably good job by sticking up for British industry and getting orders for Britain. However, she would be the first to agree that, if Britain is to win orders, our policy on bilateral aid and ATP, and to a certain extent the way that it is manipulated within Government, has to change. I have not suggested a figure to my right hon. Friend the Secretary of State for Trade and Industry. That would be silly. To suggest figures would immediately give to our opponents and competitors abroad the chance to "up" their figures as well. All I want to do is to ensure that Britain has a fair chance to obtain orders. The rest is up to industry.

Mr. Ian Wrigglesworth: I am pleased to follow the right hon. Member for Waveney (Mr. Prior) because, not for the first time, I agree with much that he said about the rather narrow policy area with which he dealt. However, I would point out to the right hon. Gentleman, to his right hon. Friend the Member for Cambridgeshire, South-East (Mr. Pym) and to their colleagues in the newly formed Centre Forward group that if they wish changes to be made to Government policy they

must understand, as I am sure they do, that Governments take notice only of votes—either votes in the ballot box or votes in this House. I believe that there are sufficient right hon. and hon. Members belonging to the Conservative party to join with some of those on the Opposition Benches who strongly disagree with many of the policies to which the right hon. Gentleman addressed his remarks to bring about the change in Government policy that the right hon. Member and his right hoe and hon. Friends seek to effect. If they are prepared to follow up their speeches with their votes, that could be so.
I am also pleased to follow the right hon. Member for Chesterfield (Mr. Benn). It is a pity that the right hon. Gentleman has not learnt, as all hon. Members need to learn, a little more humility from his experience in Government, politics and industry than he demonstrated in his speech. One of the lessons that he might have learned from the period 1939 to 1945, which he praised as a very successful period for this country, was that we then had a sense of direction and purpose which has not existed for other than the very shortest periods since the war years. That, rather than the other factors to which he referred, led to this country's success during that period. Some of the alliance members believe that that kind of success will never again be achieved in the industrial and manufacturing sectors and by the economy of this country until there is a broader degree of agreement and consensus between the parties instead of absurd and exaggerated arguments being waged over the declining body of British manufacturing industry. We have witnessed such exaggerated arguments in this debate.
It is just as absurd to suggest, as it was suggested by the Opposition Front Bench spokesman, the right hon. and learned Member for Monklands, East (Mr. Smith). that the Government are doing nothing to help industry and are leaving everything to market forces as it is to suggest, as the Minister for Information Technology suggested in his opening speech, that everything should be left alone and there should be no Government intervention. As was acknowledged by the Minister in the second part of his speech, the reality is that this Government, like every other Government, are involved in industry.
In the second part of his speech the Minister catalogued the way in which the Government are intervening in the market, helping industry and associating with it in the many ways which he outlined. My criticism is not that the Government are not intervening in industry, because they are, but that they are not intervening in the right way and are providing insufficient resources to help to prevent the decline in manufacturing industry, which is the subject of this debate.
There are many matters, with which I cannot deal this evening, that the Government might consider doing, not only by means of the revenue from North Sea oil, which amounts to about £12 billion or £13 billion, but by means of the enormous revenue that we now learn the Government will receive from the sale of British Gas. What will the Government do with the £6 billion to £8 billion that they will receive from the sale of British Gas? Perhaps they will listen to the Society of Motor Manufacturers and Traders and remove the tax on the automotive industry with part of it. If the tax on the car industry were removed, there would be a good return for British industry. The tax is regularly criticised by the


motor industry because it puts it at a disadvantage when compared to other countries. In any country the motor industry is a generator of jobs and wealth.
The revenues received from North sea oil and the sale of public assets, such as British Gas, could be ploughed back into many sectors of industry to provide the seed corn and investment for the creation of future wealth.
After six years, the Government's policies are failing. The decline in the contribution of the manufacturing industries to the economy has accelerated dramatically. I take no pleasure in recording that fact. There has been a structural shift away from manufacturing towards services in all the developing countries, but the scale of the shift in the United Kingdom was not inevitable and should not have been so great.
Twenty five years ago, 38 per cent. of our work force was employed in manufacturing. Today, the figure is 27 per cent., which represents 5·5 million jobs. There are 3 million fewer jobs. Under this Government, 1·76 million jobs in manufacturing have been lost. At 20·9 per cent., the contribution of United Kingdom manufacturing to the GDP is lower than that of any country other than the United States. That is a bad state of affairs.
The Minister pointed out that the manufacturing sector has been in terrible decline since the early 1970s. Between 1979 and 1984, however, manufacturing investment fell by 30 per cent. in real terms. Despite the past year's recovery to which Ministers have referred, manufacturing output is still 10 per cent. below the 1979 level.
This country, which was once the workshop of the world, fell in 1982 into deficit on manufactured goods for the first time since the Napoleonic wars. In 1984, the deficit was nearly £4 billion. That was a major contribution to last year's horrendous non-oil deficit of £11·4 billion. The contraction in manufacturing was pointed out graphically by the right hon. Member for Chesham and Amersham (Sir I. Gilmour) in his article in The Observer in which he said:
Net investment in manufacturing has on balance been negative since 1979; in other words the measured stock of plant at the disposal of manufacturing industry is actually lower than it was six years ago.
Those of us with constituencies in the north, Scotland and Wales can see that. We can see the open spaces where the factories used to be and the empty buildings standing around as the tombstones of our industrial past.
The sharp contraction in our manufacturing base owed much to the unprecedented 50 per cent. loss of competitiveness between 1979 and 1981. It was the result of a deliberate policy of allowing sterling to appreciate against all major currencies, and the inflation stoked up in the Government's first year of office as a consequence of the naive monetarist belief that pay increases could not affect the level of inflation. Caught by that cruel vice, manufacturers had no choice but to embark upon a savage round of closures and labour shake-outs to stay in business. Many, of course, went out of business during that period. Our manufacturing competitiveness has still not returned to the level of 1976 and 1979.
The Government have made much of the contribution of the service industries to the so-called economic recovery. All-the employment growth that has taken place since the trough of early 1983 has been in the service industries — financial services, distribution, leisure

services — and in self employment. The "improved optimism" of the CBI survey mentioned in the Government amendment is based on the interpretation that manufacturing employment will stop falling. That belief may not be unreasonable. It is borne out by my chamber of commerce's survey of local manufacturing firms. However, much of that optimism will melt away when the results of the Government's tightening of monetary policy since February this year feed through and the brief export recovery that we have seen is aborted by the appreciation of sterling.
The net increase of some 480,000 jobs between March 1983 and September 1984, about which we have heard so much from Ministers and Conservative spokesmen, includes 318,000 part-time jobs for ladies. Welcome though those opportunities are to many, such as married women, who left the unemployment register during the recession, they mask the fact that during that period full-time employment fell by 162,000.
It is ironic that the Government's anxiety to massage the figures in 1983 by changing the basis of the register now results in the fact that the return of many unregistered unemployed to work means that the latest figures for the registered unemployed are still rising, despite the increase in employment, because the people becoming employed are not on the register. The Government's excuse, that the labour force is still increasing, takes no account of the fact that over the past 10 years the United Kingdom has had a lower working age population growth rate than almost all the major industrialised countries. It was Keynes, I think, who remarked that we should remember that for every pair of hands there is a mouth. The increase in the working population provides the opportunity for increased consumption and increased production. Increased population provides us with an opportunity for economic growth and not for the stagnation that we have seen in recent years.
The manufacturing sector, as an engine of wealth creation, remains crucial to the economy. Half the value added in all our exports of goods and services comes from manufacturers and one third of the remainder comes from the service industries interdependent upon manufacturing exports—transport, shipping, finance and insurance—and nearly two thirds of exports of goods and services are derived from manufacturing.
As the director general of the CBI said recently in his speech to that other Conservative splinter group —Conservative Action to Revive Employment:
if anyone thought services could replace manufacturing in our exports, they must remember that if they did our service earnings would have to be three times as big as they are today.
That is an inconceivable change, and I do not believe that anyone would seriously suggest that it could happen.
As the right hon. Member for Cambridgeshire, South-East said, the Government have no industrial strategy. They have now entered their seventh lean year and there are few prospects of any fat years ahead. The Government are relying on the increases in the special employment measures contained in the Budget to contrive a reduction in the employment figures before an election in 1987 or shortly after.
The Government ridicule people, such as Lord Weinstock of GEC and the chairman of ICI, John Harvey-Jones, and suggest that they are out of their tiny Chinese minds when they call for a clear exchange rate policy and are sceptical of the suggestion that services can fill the gap


left by the decline in manufacturing. It is a pity that that type of attack is directed towards the leaders of some of our more successful industries, which contribute to so many parts of the country and so much to the national economy.
This year's public expenditure White Paper revealed the extent to which the Government have savaged spending on jobs and industry. In the five years up to 1987–88 they will have cut the budget of the Department of Trade and Industry by half in real terms. Spending on regional development grants, which has already been halved in three years, will fall by a further 43 per cent. in cash terms over the next three years. The only advantage of the Government's scorched earth policies is that they make it possible to embark on an entirely new strategy of constructive intervention, working, as we should like to see, with the grain of the market.
For industry, this depends on getting the right framework of macroeconomic policy. We have debated that issue on previous occasions and we shall, no doubt, debate it on many future occasions. We have in our budget proposals a modest fiscal expansion of £4 billion, which would cut unemployment initially by 0·5 million and in 1987 by 900,000 below the forecast levels, and cut increased borrowing by £1·9 billion. Unlike any other packages on offer, our policy has a credible anti-inflation element in the form of a firm monetary policy, within the framework of the European monetary system, helping to stabilise the crazy interest rate and exchange rate see-saw that has taken place since the winter.
In February the Chancellor rejected the advice of his chief economic adviser and the enthusiastic support of the CBI and industrialists, as well as the technical opinion of the governor of the Bank of England, and spurned the opportunity to join the exchange rate mechanism of the EMS at a competitive rate against the Deutschmark and a basket of European currencies.

Mr. Tebbit: Is the hon. Gentleman in a position to say whether the two industrialists he named—I will not ask him about any other—Lord Weinstock and Mr. Harvey-Jones, are enthusiastic advocates of the alliance policy of taxing away pay rises which are judged to be excessive? It would be interesting to know whether those two gentlemen support that policy.

Mr. Wrigglesworth: They, like many other industrialists, on looking at the policy that my colleagues and I have proposed, will realise that a decentralised incomes policy of that sort is better than not having the growth in the economy that would help their companies to grow more rapidly than they have done in recent years.
The difference between ourselves and Conservatives or Socialists is that we in the alliance are at last prepared to confront the problem, which is more than can be said of Ministers. All that we get from them, as we got from the Minister earlier, is sheer exhortation, with complaints about the level of income increases and the effect that that is having on our competitiveness, inflation and the economy generally.
From the Government we get nothing but exhortation and from the Labour Benches we get only a refusal to face up to the consequences of pay increases. At least from the alliance there is a recognition of the problem that confronts the country, and we put forward solutions for dealing with it.

Mr. Prior: Many people have quoted in defence of their cases words that Lord Weinstock is reputed to have used. As he is the managing director of GEC, perhaps I should remind the hon. Gentleman that it would be wise for people to wait to read the evidence, when it is published. I have read it and I assure him that it does not necessarily conform to what the hon. Gentleman said, to what my right hon. Friend the Member for Cambridgeshire, South-East (Mr. Pym) has said or to what was said by the right hon. and learned Member for Monklands, East (Mr. Smith).

Mr. Wrigglesworth: The remarks of the managing director of GEC were widely published when they were made before the Select Committee. The right hon. Gentleman should not believe that I and other hon. Members have not read them with great care and did not draw the obvious conclusion, that he was being most critical of the policies of the Government. I appreciate that from my contacts with industrialists, because his remarks bore out what I have found is the feeling among those in a broad spectrum of British industry about Government policies in recent years.
I move from the general macroeconomic issues to the question of the high technology industries and innovation. We must acknowledge the findings of a number of investigations that have been made. The Ashworth report last autumn showed that Britain's growth rate in information technology, at 12 per cent. between 1970 and 1982, was slower than that of any of our main competitors. In Japan it was 23 per cent.; in France, 19 per cent.; in the US, 18 per cent.; and in West Germany, 15 percent.
It also showed that our share of world output in information technology fell from 9 to 5 per cent. and that our balance of trade had deteriorated from parity to almost £1 billion, with import penetration accounting for more than half of the market.
In biotechnology, the British Technology Group could find few British backers for its Agricultural Genetics Corporation, and Celltech has had to go into partnership with an American company, Air Products, to develop its new product.
While the application of microelectronics grew in the United Kingdom by 60 per cent. between 1981 and 1983, only 10 per cent. of those companies were using microchips as part of their product ranges. Recent published studies by the Policy Studies Institute and PA Technology show that we lag behind competitors such as West Germany and the United States. About 19 per cent. of the firms in the PA survey reported a high impact of information products at 16 per cent. of processes. That compared with 44 and 38 per cent. in West Germany, and 42 and 34 per cent. in the United States. That is a clear indication of the way in which we are falling behind.
The PSI survey showed that Britain's continuing failure to innovate owed most to inadequate training and a shortage of professional engineers, which the Information Technology Committee, under the chairmanship of the Parliamentary Under-Secretary, estimated at 1,500 now and at over 5,000 by 1988.
It is estimated that employers are spending £2·5 billion on training — on average less than 1 per cent. of turnover— and are failing to fill the gap left by the collapse of apprenticeships in recent years, down from 100,000 in 1979 to 40,000 in 1983, coupled with the abolition of most of the industrial training boards
We believe that there is need for a considerable increase in investment in education and training. As I have said from these Benches before, one way in which we could help to co-ordinate and improve training in Britain far more than we are doing now is to bring together the training side of the Department of Employment and the education and training side of the Department of Education and Science, and have a department of education and training.
Many people are getting increasingly worried about the enormous growth of the MSC and all the work that it is doing, and about the way in which it fits in with the work of the further education colleges and other training institutions which are run by the local education authorities, basically under the auspices of the Department of Education and Science.
I hope that the Government will consider bringing those two much closer together, getting a better use of the resources and turning the YTS, which we fully support, into much more of a training module that will help the young people taking part in it to go on to further qualifications. It is not as good as it should be. It should contain a bigger training component, and it is important that the scheme be developed with more resources. We on these Benches would like to see various types of action being taken in those areas. There is need for a larger general programme to upgrade and extend maths and science teaching in the schools. The Secretary of State for Education and Science is doing a number of good things in that connection, but we need to do more, more rapidly, with more resources being applied. We need crash programmes to provide more people qualified in electronics and more teachers qualified to teach maths, science and technical subjects. This must be a matter of the highest priority. I am not saying that the Government are not aware of this or that the Secretary of State is not doing anything. He is, but the Government must give a higher priority to, and put more resources into, this whole sphere.
The science budget should be increased by £50 million to restore the recent cuts that have been made. It is appalling that, in this period of our history, that budget should have been cut. The Minister did not say that the £43 million that was being injected in this area was being taken out of existing budgets, so that it did not represent an increase in real expenditure.
We also believe that there should be an increase in expenditure in support of innovation. The Minister explained how much the Government were doing, but more needs to be done. Expenditure on this aspect was frozen by the Government at £185 million, with a complete moratorium imposed on applications, as the right hon. and learned Member for Monklands, East pointed out. I know how much that has hit many firms because one such company is in my constituency. I hope that the Minister will pursue that case following this debate.
The Minister recently wrote to that company — it makes industrial robots—congratulating it on what it had achieved. At the same time, his hon. Friend had almost brought the company to the verge of bankruptcy by the moratorium and by withdrawing support for a flexible manufacturing system on which the firm was embarking. I hope that the Minister will investigate that case. I am certainly willing to send him the correspondence. The

effect of that moratorium was extremely damaging for firms in the very area in which this country needs to expand as rapidly as possible. More money, not less, is therefore required.
We also need a far more effective programme than the Alvey programme. It is staggering that only £40 million has been taken up from a budget of £350 million. It might meet the Government's prejudices if the programme became rather more market oriented, along the lines of the German microperipheral support programme, which relies far more on decisions on products and marketing for the small, high-tech companies involved. I hope that the Minister will also consider that.
The right hon. Member for Waveney tends to write off the need for more money for research and development. I know that his company and many others spend a great deal on this, but many sectors of industry spend nothing like as much as they should. That being so, in addition to giving grants the Government might consider working with the grain of the market and using the tax system as a carrot to encourage firms to invest more in research and development.
We propose also that the Government should introduce an industrial credit scheme. The capital markets in the City have many excellent features but for a very long time the City has lacked a market in fixed, long-term bonds. Efforts have been made to try to get such a market off the ground but they have never worked. Press reports in the past 24 hours have shown that American operators are now moving into this area of the London market to try to create a real market in stock of that kind, but I do not believe that that will be enough. Firms need a means to avoid the high rates of interest that they now have to pay on such loans.
An industrial credit scheme—rather like a domestic ECGD — would help to direct investment towards research and development and other development programmes on which companies wish to embark by providing a fixed rate of interest over a period, supported by the Government. We believe that that, together with small firms investment companies, would be of enormous benefit in helping companies to increase their investment. It would also be a highly cost-effective way of working through the market and the banking system to provide a subsidy on interest rates for approved schemes. For instance, a subsidy of £100 million per annum over five years would allow £1 billion to be made available in loans at 10 per cent. below market rates, or £2 billion in loans at 5 per cent. below market rates. That would be of enormous benefit to companies and I hope that the Government will consider it most seriously together with the proposal for small firms investment companies which we, the CBI and other organisations have suggested.
I have covered the major areas in which we want action to be taken. If my hon. Friend the Member for Yeovil (Mr. Ashdown) catches your eye later in the debate, Mr. Deputy Speaker, he will expand on some of the other areas which are covered by our amendment and in which he has taken a close interest. I hope that the Government will recognise far more than they have so far that there is a desperate need for action in the whole area of manufacturing industry and high technology. If the Government do not move quickly, the boat will have gone and we shall be left high and dry if North sea oil runs out and we do not have the manufactures that we need on which to base our service industries to create wealth and jobs for the future.

Mr. Ian Lloyd: The hon. Member for Stockton, South (Mr. Wrigglesworth) invariably engages our interest. I followed his speech today with interest and agreed with some of it. So often on these occasions, however, we each have our own template that we apply to the British economy—and probably our own version of the economy that we apply to the template—and then comment on the parts that do not fit. My right hon. Friend the Member for Waveney (Mr. Prior) did very much the same. The common feature is the attempt to wash the problems with money. It is always a beguiling and plausible argument. Many problems can be washed with money, sometimes successfully and sometimes not.
At present there is a cornucopia in the North sea. The latest manifestation concerns the proceeds from British Gas, but hon. Members on both sides seem to think that that money can be spent twice. I have never been persuaded that that is so. Unless one hypothecates it—an argument that the Treasury has rightly resisted for a very long time—the money goes to the Treasury and reduces the Government's requirement in terms of borrowing or taxation to meet their total commitments, but that money cannot be spent twice. If we hypothecate it, allocating some or all of the North sea revenues to these very desirable projects or even adding £2 billion to ECGD, either the money must be found elsewhere in the system or other projects have to be abandoned or curtailed. I have never heard a satisfactory explanation of how that can be avoided, so I am riot persuaded.
If those who use that argument could say where they proposed to take the money from or what they intended to curtail—or, more significantly, how they proposed to increase GNP by X per cent. and to spend that real increase when it became available — I should have infinitely more sympathy with the argument for increased research and development, more support for the semi-conductor industries, of which I approve, or more assistance for overseas companies. In that context, we could learn a great deal from the extraordinarily interesting example recently written up in the greatest detail in a fascinating OECD report on the way in which the great Japanese trading companies operate.
I take issue with the claim of the right hon. and learned Member for Monklands, East (Mr. Smith) that the Government do not believe in Britain as a manufacturing economy. We are having difficulty in this debate about the definition of the term "manufacturing." In the United States, the total employed in what is defined there as manufacturing—their definition is not dissimilar to ours —has, I believe, declined from about 26 per cent. to about 11 per cent. in the past 10 years and is still declining. So far as I have observed, however, that decline has not been associated with any decline in the real wealth or economic performance of the United States.
The number of people employed in the United States service sector has risen to such an extent that nearly 60 per cent. of the employed population is now employed in that sector. The right hon. and learned Member for Monklands, East implied that the British Government were trying to force people into service industries so as to create a low-wage economy. That is poppycock. Those employed in the service sector in the United States are among the most prosperous people on earth. We should consider that example if we, too, want to prosper.
The facts are obvious. One does not need to get into a space shuttle, as a United States senator recently did, to grasp those facts. One has only to consider modern manufacturing technology in those areas of the world where it is at its most successful and prosperous. Some are in the United Kingdom, some in other parts of western Europe, many in the United States and, regrettably, a very large number in Japan. The very small segment of the employed population whom we used to describe as employed in the manufacturing sector, because we recognised that they were doing something with their hands—standing at a lathe and handling products—has decreased in the most outstanding cases to less than 1 per cent. of the total work force, but it is supported by a vast tail of extremely skilful, sophisticated people supplying services which that sector requires to compete arid to achieve its legitimate and important industrial objectives. We would be unwise to lose sight of that essential fact.
As I have argued before in the Chamber and will argue again—not least because some months ago in Japan I witnessed the many changes that have occurred over almost five years—there is no escape from this direction of movement. It will happen in Britain, western Europe and throughout the developed world. If it does not, many of the difficulties that we fear will come to pass. There will be serious unemployment and loss of wealth and capacity. Our relative position will continue to decline.
Another point on which I take issue with the right hon. and learned Member for Monklands, East concerns IBM. I declare an interest, because of the large IBM plant in my constituency. The right hon. and learned Gentleman said that we must consider and help only our industry. I do not want to delve too much into the merits and demerits of this case, but I must point our that, in the information technology sector alone, IBM is the largest single contributor to our balance of payments. It employs 12,000 or more British citizens. How can we define information technology firms as "ours" or "theirs"? The old definition is obsolete. We cannot look intelligently at this aspect if we look through our spectacles in terms of what is inside or outside a national frontier.
From where does ICL derive its semiconductors, much of its software and, recently, some of the most interesting developments in advanced computer technology? The answer is Japan — and good luck to ICL. That is probably the right policy. ICL is still, however, "our" company. I hope. that it will make an even larger contribution to our information technology balance of payments.
A much more fundamental point concerns what our strategy should be. The Opposition are fond of the word "strategy." I am not so fond of it, because in many cases the results of strategies adopted by Governments have been singularly uninteresting and unsuccessful and, in some cases, disastrous. If we look at "strategy" in this context, we must recognise that we have no alternative but to go for restructuring. Total world semiconductor output is $29 billion, including $2 billion from western Europe as a whole, $18 billion from the United States and $8 billion from Japan.

Dr. Bray: I am sure that the hon. Gentleman would not wish to mislead the House in referring to contributions by companies to our balance of payments. IBM claims that its exports equal its imports. Therefore, it makes a net nil


contribution to our balance of payments. That is a great deal better than other American companies in the United Kingdom which have much higher imports than exports.

Mr. Lloyd: I am sure that the hon. Gentleman could make a very effective point on this, but I still say that Britain would be substantially poorer, our information technology as technology would be less and our economic performance would be substantially reduced if, as a result of what is said here today, IBM said, "No more investment in Britain. We shall wind our business down and take it out of Britain. They do not regard us as their company any longer."

Mr. John Smith: The hon. Member for Havant (Mr. Lloyd) appears to have been directed by a point in my speech. My point about IBM had nothing to do with investment. I raised the problem of companies like IBM sending letters to all the people who had bought their products, reminding them of some sort of obligation to observe United States law. I pointed out that when we are dependent on companies such as IBM, that is not a sound strategic position. I hope that the companies concerned defy the invitation contained in the letters. That was all I said about IBM. Perhaps the hon. Gentleman will accept that and tell us what he thinks about the problem that I have raised.

Mr. Lloyd: I am glad to accept that invitation. I appreciate the dilemma of the right hon. and learned Gentleman, the Government and IBM. IBM must follow the dicates and sense of its Government. That Government pretend and say that they have at the centre of their policies the interests of the defence of the West as a whole. These are severe and serious paradoxes, to which I do not pretend to have the solutions. I would not say that tomorrow the United States Government must abandon this policy and let all technology flow without restraint into the Soviet Union. Equally, the imposition of severe commercial constraints outside the jurisdiction of the United States Government raises considerable problems which we should address more seriously.
The most offensive part of the Opposition's motion was the reference to "wilful neglect". I find that hard to accept. Of course, it can be argued that there has been neglect. I would have been less concerned if the motion had referred to "mistaken", "misjudged" or "serious" neglect. I do not believe that either the Labour Government or the Conservative Government have shown "wilful neglect" in solving those problems. They are often much larger and more complex than people realise. All Governments make mistakes, but I believe that we have made fewer mistakes throughout the 20 years during which I have been arguing in the House that we should have a larger, more prosperous and more successful information technology industry.
If our information technology industry is insufficient, what is the reason? Why has Europe as a whole—not just the United Kingdom — failed to surf on this enormous industrial surge which can be seen on an examination of almost all the statistics? The answer—I do not claim any originality for this—is that we do not have a Silicon valley or a Tskupa science city, which are two ways of building an information technology industry. Both those ways have been highly successful; our way has been less successful. We must learn where we can and

adapt the successful lessons to our circumstances. Above all, we must adapt them in our strategy. We must choose where we shall be excellent and successful. The Government, the private sector and everyone else involved must do everything in their power to achieve that objective.
Two perspectives are missing — technological and entrepreneurial. The Government have been doing everything in their power to give a positive stimulus to the creation of an entrepreneurial culture, and I support that entirely. I shall give one example showing where we have failed and others have succeeded.
Recently, I attended a conference in France at which a presentation was made by a four-year-old American company. I shall give its name because I should like hon. Members to know what it is doing. The company is called Birdview Satellites. In 1981, the company had a turnover of about $700,000. This year it expects a turnover of about $100 million. That is what the company has done in only four years. That company has discovered that there is an extremely important and interesting market for the supply of domestic satellite receivers to the private individual in the United States. Nearly 1 million have now been supplied, and the company has been supplying about 10 per cent. of that total. The company expects to grow bigger. It is extremely successful commercially.
Why have we not done the same? We have not done so because our whole regulatory framework and attitude is one of fear. We are terrified of what may happen if someone can tune in a television receiver and get a direct signal from a satellite. The United States Government had exactly the same fear and probably went through the same arguments, but eight months ago they gave the green light, with the result that the company is now employing 800 people. It is making things which have never before been listed in the manufacturing handbooks. In my judgment, it will soon be a very substantial company. It has not happened here because we lack the technological imagination at all levels of our society and the entrepreneurial attitudes which follow that imagination.
We have done partially what we set out to do. One is reminded of the examiner's report, "Could do better." All Governments could do better. I do not think that any Government have an exemption in this context. The technology that we have to apply is undoubtedly all-pervasive and is sweeping into every aspect of our society. There is no point in any of us being under the illusion that by opening up the taps and the hoses of public expenditure we can go back to the days of 1972 or 1968, and that the old factories will be filled with old chaps doing the old things. That has gone, and it will never happen again. We have only one road before us—and that is forward. We can take it only if we support adventurous, skilful, but essentially carefully chosen, policies. That is the main point that I want to make.
We shall fail completely if we divert too large a proportion of our resources to attempts to maintain old industries in old places. With new information technology, new computer-aided design and manufacture, some firms in some industries may be helped to survive. If we know that, through information technology, the standardised technologies have migrated to the Third world — and they have been encouraged and assisted to migrate by some of the Japanese trading companies to which I referred earlier—all we shall be doing is pouring good money after bad. We shall be wasting our national resources on


an unforgivable scale if we continue to subsidise industries which we know perfectly well cannot ever recover. We must help them and the communities which were employed in them in every possible way to change direction and to move forward. If we do that, we shall regain our national prosperity.

Dr. John Marek: The hon. Member for Havant (Mr. Lloyd) took exception to the use in the Opposition's motion of the term
wilful neglect of British manufacturing industry".
I am happy to see the word "wilful" in the motion because I think it is rightly there. The Opposition see the Government as having one idol before them — the market—so that everything the market wants must be right. From that point of view, the Government wish to disengage themselves from interfering in industry and from helping industry in any way. That is why the word "wilful" appears in the motion.

Mr. Tony Baldry: The hon. Gentleman must understand that the Conservative party has always been an interventionist party. If we had simply left it to the market place, there would not be a motor car industry, a shipbuilding or a ship repairing industry in Britain today.

Dr. Marek: I am afraid that there is not much of a motor car industry today, and there is not much of a shipbuilding industry either, so I cannot agree with the hon. Gentleman.
It may well be that the real Conservative party is an interventionist party. Unfortunately, it has been hi-jacked, and the present Conservative party is a completely different creature. Therefore, I stand by what I said—that the word "wilful" is in the motion because the present Conservative party believes that anything the market wants is right. The market wants to have freedom to go abroad for its investment, or to stay here it can get enough profits.
The Government have in many ways got rid of all the possibilities that Governments used to have in developing vital industries in Britain. In addition, the Government have been proclaiming that there has been a recovery, that there is record investment in manufacturing, a record growth of exports, that employment is at an all-time high, and that unemployment is about to fall. The Government have put their case cleverly because it disguises the truth about what is happening to the nation.
The Government forget that 1979, 1980 and 1981 were three disastrous years for the industrial areas. Industry was decimated. It is no wonder that after the disastrous record of 1981 and 1982 the Government can point to some sort of recovery or increase in investment. It comes as no surprise that productivity has increased after the honors that the British people had to endure in the first three years of the Government's first Adminstration. There is some recovery, but in many ways it has not yet brought us back to where we were in 1979, certainly in manufacturing. The hon. Member for Yeovil (Mr. Ashdown) said that manufacturing output was about 10 per cent. below the 1979 figure. He said that investment in the United Kingdom is 33 per cent. below what it was in 1975. My figure is 25 per cent., but I will not argue about it.
We have seen a series of disasters. The money supply figures for April were awful. As a result, we shall see high interest rates continuing. No doubt the "month-on" figures

will show that inflation will drop towards the end of this year and early next year, but City economists are now expecting inflation to rise after that.

Mr. Baldry: The hon. Gentleman is carping about what he regards as a series of disasters. Does he include the announcement yesterday from his constituency that Sony is to double its employment, with the expectation of adding several hundred more employees in the next two or three years?

Dr. Marek: It is not Sony but Sharp. Naturally, I am very pleased about the announcement, but it should be recognised that it has happened because the Wrexham borough council went to Japan and got the contract by talking to Sharp. I have had a detailed account of how the contract was obtained. Wrexham borough council used ratepayers' money to secure industrial development The Welsh Office does not "disregard" that money and it is liable to grant holdbacks. Wrexham borough council, against the desires of the Government and Conservative Members, went out and obtained a deal so that microwave equipment will be made in Wrexham instead of West Germany or France — countries which understand manufacturing and the business of getting investment.
The Government are following a disastrous policy of lowering the industrial base of this country. Unemployment is increasing, and there are no signs of it decreasing. The underlying trend is still high. It is telling that the Minister argued with my right hon. and learned Friend the Member for Monklands, East (Mr. Smith) whether the unemployment figure was 3·2 million or 3·8 million. It is a sorry state when the figure is over 1·5 million — its level when the Labour Government left office. It is now at an all-time high. The Government claim the figure to be 3·2 million, but in reality it is well over 4 million. Many of the jobs that they include in the figures are part time and low paid. The figures when the Labour Government were in office related to head-of-household jobs—people who worked to support their families.
It is true that Sharp will provide 190 jobs in Wrexham — indeed, I hope that eventually the figure will be higher. But three or four weeks ago Courtaulds announced that 510 jobs would disappear from Wrexham. The workers were not told about that, yet the chairman put his name to an article saying that companies should always tell their workers their plans and not spring surprises upon them. The Courtaulds action is an example of something that I do not regard as good company practice. Without any warning, it has taken away 510 head-of-household jobs. They are well-paid and skilled jobs. We do not know why Courtaulds is doing this, but we suspect that it will transfer the work to its factories in Barcelona and Russia. The other Courtaulds factory to be closed at Greenfields will transfer its production to Grimsby. However, it is common gossip that the Grimsby factory will also close and the production transferred to India.
If I am carping, so be it. I and my hon. Friends are indignant about this matter. It is time that the Government faced their responsibilities and took action. Instead, they say, "Let us see how it goes. We have £40 million for this and a few million for that. We will rejig the figures. Just trust us and everything will be fine." I do not believe that. Many Conservative Members now recognise that and are making the same criticisms about Government policy that the Opposition continually make.
The Building Employers Confederation said in its June publication:
While a further modest growth in building industry output this year is indicated by responses to the current Building Employers Confederation State of Trade Enquiry, enquiries for new work remain flat and less than one-third of firms questioned are working at full capacity.
Similar items have appeared in its previous bulletins during the two years that I have been a Member of Parliament. Not one article has suggested that the building industry can look forward to an upturn in new building and employment.
When Conservative Members make ritual noises about not wanting unemployment and pretend that they are sorry about it, they say, "We are going through a bad patch. Do not blame us; there is a world recession. We are trying to do our best." I question their sincerity when they troop through the Lobbies day after day supporting Government policies that lead to high unemployment.

Mr. Michael J. Martin: They shed crocodile tears.

Dr. Marek: Precisely. Conservative Members do not place a high priority on reducing unemployment.
I find it frightening that last year, for the first time, there was a trade deficit in our manufactured goods, and as an exporting nation that is a danger to our survival. I could never support a Government who pursued policies that resulted in a deficit in our manufactured goods.
There is also a growing deficit on the non-oil trade account. The hon. Member for Yeovil mentioned a figure of £12 billion. It is true that non-oil exports have risen by 1 or 2 per cent. since 1979—something upon which the Government seize—but, unfortunately, non-oil imports have also risen, and not by 1 or 2 per cent. but by more than 4 per cent. Surely that worries the Government. They tell us the same old story of exports being at record levels, and say that industry needs to be left alone to produce the goods and make the profits. They should be worried that non-oil imports are exceeding non-oil exports by a factor of four to one. Perhaps the Minister will tell us whether he is worried about that. It certainly worries the Labour party.

Mr. John Maples: Of course Conservative Members are worried about the deficit in manufactured trade. Will the hon. Gentleman explain the Labour party's policy of leaving the EEC, with which most of our manufactured trade takes place? How can such a policy help to increase our manufactured exports?

Dr. Marek: I do not want to delve too much into that aspect of Labour party policy—[Interruption.] I did not support Britain's entry into the EEC, yet I have always believed that we should follow the treaty to the last letter. But as the other EEC countries do not adopt that view, we only harm ourselves if we pursue that attitude. I regret that I have reached a view that we should take a sceptical attitude to many of the EEC regulations.
Hon. Members have mentioned Japan, and I agree that it is a world leader in the way that it organises its industry. I have no connection with Japan and, indeed, have never visited it, but I have spoken to people who have been there. They say that Japan organises its main manufacturing industries in an efficient manner with new

high technology. I understand that one can walk about factories in Japan without seeing any workers other than one or two controllers. All the work is done by robots. However, the Japanese Government ensure that their people are employed. For example, one might use a bank card in the high-technology system outside a bank, but inside there are armies of clerks looking after one's affairs. There are many people in the service industries.
That is the difference between the attitude of the Japanese Government and the attitude of the British Government. We need investment and the most modern high technology for our manufacturing industry, and we cannot survive without it. But we must consider the people that technology displaces. The Government have thrown them on the dole queue and told them that they have no future. Young people, after two years on a youth training scheme, are trained only for a life on the dole. That must be changed. I recognise, as hon. Members have said, that we are changing over to more jobs in the service industry because all the developed countries have been doing this.
As an example, let us take the railway system. Instead of trying to cut down on the services available on platforms and in the trains, if the Government said that people should be employed to provide a decent service, and a degree of comfort, those engaged in the industry could take a pride in running an efficient railway system. If the Government took that view and at the same time insisted on having the highest technology and the most modern system of production in our manufacturing base, we would have much more of a one-country feeling and more unity of purpose with a sense of going somewhere as a developed country. I am sorry to say that at present that unity of purpose does not exist.
I do not believe that the people of Japan are more inventive than the people of this country. The people of this country are second to none in their inventiveness, creativity and ability to do front-line research and in enabling technologies so that front-line research can be put into action. Not much thought is given to this by the Government. It seems that the only thing that the Government can crow about is the fact that small companies are mushrooming and bringing forward new technology, but big companies have to be looked after as well in terms of research and development.
The Government have an interventionist role to play to make sure that the creativity of the people of this country can be put to good use, but this is the problem that the Government fail to recognise.
Let us take universities as an example. Since 1979 universities have been worried about whether they will retain the same numbers of people in their departments and whether the students will be forthcoming. This must have an affect on teachers in their researches and in their teaching. Indeed, I know that this is happening in universities, because I was at a university until 1983. Almost any university teacher in the country, when asked, will speak of the lack of morale. People wake up in the morning wondering whether there will be some new announcement by the chancellor or the principal that another 20 or 30 jobs must be cut because of the Government's plans to cut ·5 per cent. for the next five years. This cannot be the way to run a country or to ensure that we become a developed nation again.
To give one example, I quote from an article in this week's Economist entitled "The Thin Way to Faster Chips" on the subject of low dimensional structures. The


stage has now been reached where the chip is so small that problems arise if one wants to make it any smaller. We must now consider whether there is a future in molecular electronics as opposed to the current well-known standard microchips. The article says:
The British Government is so impressed by the potential of low dimensional structures technology that it is considering spending up to £20 million on a five-year research programme to co-ordinate the work of universities and private companies. One spur for this initiative is the British contingent's dismal performance at a conference on low dimensional structures held in Oxford in late 1983 when few of the research papers came from British universities.
That sums up the present state of our technology. Everybody is worried about whether there will be enough money and whether their research, teaching or company job will exist in three or four years. They do not have the time to spend on such matters as low dimensional structures technology which may be of crucial importance in five, 10 or 15 years. Make no mistake about it—countries like West Germany, France and Japan do not follow these lines. If there is a possibility of technological advance, the money is provided, and there are no half measures about it.
I should like the Government to do an about-turn. The Government should realise that they have an interventionist role to play in regard to industry and technology.
Although the right hon. Member for Waveney (Mr. Prior) spoke about something slightly different from me, I agree with what he said about support for industries from the Export Credits Guarantee Department and better bilateral aid. Again, we can learn from the French, the Germans and the Japanese, but I am sad to say that we seem not to be learning.
The Government must get rid of their obsession with medium-term financial strategy and grocer shop economics. There are important questions to be considered about fifth generation computers and enabling tech-nologies, and we still have time to take some action. I hope that the Government will realise the error of their ways. If they do not do anything about it, the next Government will.

Mr. Deputy Speaker (Mr. Ernest Armstrong): I should tell the House that the 10-minute rule will apply from 7 o'clock.

Sir David Price: I shall endeavour to put up the productivity of speeches and be rather briefer than other hon. Members.
I have listened to some of the speeches of Opposition Members, in particular that of the right hon. and learned Member for Monklands, East (Mr. Smith). I can tell the right hon. and learned Gentleman — I do not know whether he will be pleased or disappointed — that manufacturing industry in my constituency is doing very much better than the Opposition's motion or the right hon. and learned Member's speech would suggest.
I suggest that there are two reasons for that. The first lies in the fact that we have nurtured and encouraged new high-tech industries. In addition, in our older industries we have been applying high tech to the traditional products and to older methods of production. I know that some of my hon. Friends in the aspirant part of the Administration, Parliamentary Secretaries, who have visited my constituency, have seen evidence of this.
I have a personal reason for intervening in the debate. I am fundamentally an industrial animal. I came into the House 30 years ago from industry. I still retain a modest working connection with industry. Indeed, I find this helps me to keep closer to economic reality. I still feel more at home on the shop floor than on the Floor of the House.
British industry is doing better than the Opposition make out, but it is not doing well enough. I believe that we have a long way to go before we can with confidence face the future in the knowledge that we have a sound enough base to deal with the challenges of the future, particularly those that my hon. Friend the Member for Havant (Mr. Lloyd) pointed out, and upon which we can build a freer, more responsible and more prosperous society.
What is wrong with British industry? As a Back-Bencher, I will not detain the House on a detailed answer to that question; it would be beyond my proper station in the House to endeavour to do so. I shall content myself, therefore, in proof of this proposition, with a short quotation from a discussion paper produced by the CBI in which it identifies three significant problems:
The structure of UK production and trade is very down-market in relation to UK cost levels and, hence, is highly vulnerable to competition from low-cost producers. Despite success in improving productivity, UK costs are rising relative to those of competitors. We are still losing market shares (both in goods and services).
In support of this analysis by the CBI, I should like to draw to the attention of the House the amount of foreign machinery that is used in our factories today. I am sure that hon. Members, when they visit factories, observe the type of machinery that is being used and, above all, look at the nameplate showing where the machinery was made. It is depressing that so much of it is foreign made.
My own professional institution, the Institution of Industrial Managers, recently conducted a survey of the machine tools used in many of the factories in which its 23,000 members work. It found that a depressing number of machine tools were foreign made. When it asked why members were using a foreign machine, it received answers which gave the clue to the basic structural weakness in British industry and in our society. The first question was:
Is it because the type required is not made in the UK?
A total of 93 per cent. of the managers using foreign machines gave that as the first reason. The second question was about foreign machine tools having more advanced technology. A total of 78 per cent. said that that was the reason. A total of 57 per cent. said that foreign machine tools were more reliable, and 57 per cent. said that they were cheaper, but cheapness was not the principal reason. The principal reasons were non-availability of machines with the level of modern technology required and the fact that foreign machines were more advanced technically. These reasons are telling. They have nothing to do with whether machines were cheaper or whether delivery was better.
The answer to our industrial weaknesses does not lie principally in the manner in which this Government, or any other Government, manage the macro-economy, although obviously economic management matters. I believe that the answer is to be found in our anti-industrial culture, in our prevailing social values, and, above all, in the low esteem which we place on engineering. In short, we place engineers too low in the pecking order and reward them too poorly.
We have suffered far too long from the unholy alliance of the aristocratic Right and the intellectual Left in the proposition that industry is a dirty business and is not for us. Of course, the need for industry is reluctantly accepted as an intellectual proposition by the alliance, but it is emotionally, culturally and socially scorned.

Mr. Tebbit: I agree with what my hon. Friend has said about the intellectual arrogance of the aristrocratic Right and the political Left, but when they are combined in the same person in an arrogant and extreme Left aristocrat it is worst of all.

Mr. Benn: The Japanese, with a national income of much more than twice ours, spent 1 per cent. of their national income on defence when we spent 6 per cent. It is no wonder that the world's shops and showrooms are crammed with Japanese cameras and videos and that all we can sell are missiles to the dictators whom the Secretary of State loves so much.

Sir David Price: I disagree profoundly with the right hon. Member for Chesterfield (Mr. Benn). He is talking about the difference between 1 per cent. and 6 per cent. and I am talking about the cultural attitudes of the United Kingdom towards its engineers and those who get their hands dirty in industry.
I shall illustrate my point from Government. The Treasury is the greatest of the economic Departments. I am told that it is staffed by the cream of the intellectual elite of our Civil Service. Who in the Treasury has managed a factory? Who in the Treasury has supervised a building site, built a bridge, designed an aeroplane, or won a contract in Japan or Texas? In the world of wealth creation, the Treasury is an economic eunuch, as are many in the media who criticise and lecture us about industry.
The House may think that I exaggerate, so I shall quote from a much under-studied and under-read report by Monty Finniston and his colleagues called "Engineering our Future". It states:
It is internationally acknowledged that Britain is a country rich in inventiveness and creative talent. Yet, with some eminent exceptions, these inventive talents have not been harnessed effectively by manufacturing industry because, compared with Continental Europe and the large part of the world which has followed its lead, there have been neither the cultural nor the pecuniary rewards in this country to attract sufficient of the brightest national talents into engineering in industry. Great prestige is attached to science, medicine and the creative arts, so that to be associated with their activities is to share in that esteem, but there is no cultural equivalent in Britain, and hence no basis for according similar esteem to the European concepts conveyed in German by `Technik' — the synthesis of knowledge from many disciplines to devise technical and economic solutions to practical problems.
Over the 30 years that I have sat in the House I have become aware that Britain lacks that "Technik". We do not respect our engineers. What happened to the Fulton report about engineers and scientists in the Civil Service? How many such people have become permanent secretaries?
Until we give the engineer and the industrial manager a proper place in our society we shall not realise the full potential of our people and of our economy. I say to the House, "Come back Telford; come back Watt; come back Brunel. All is forgiven." If any hon. Members thinks that I am preaching a purely materialistic culture which lacks spiritual values, I remind him of the wise saying of Dr. Samuel Johnson:

that words are the daughters of earth and that things are the sons of heaven.
I remind the House that, to be caring and compassionate, it is not necessary to be inefficient.

Mr. Stuart Randall: I am sorry that the hon. Member for Havant (Mr. Lloyd) is no longer in the Chamber, because his speech contained many interesting comments with which I agree. In particular, I agreed when he said that the Government had neglected the information technology industry. He said that the neglect was not wilful. I think that he was wrong.
One reason for the neglect is that the Government have not accepted the remarkable change in the industry. Many of the statistics used by the Minister, comparing this Government with the last Labour Government, were invalid because we are now on the vertical part of the graph and the rate of change is remarkable.

Mr. Hayward: The hon. Member for Kingston upon Hull, West (Mr. Randall) is not being fair to my hon. Friend the Member for Havant (Mr. Lloyd), because he said that Government had neglected the industry in certain circumstances. He did not relate his comments specifically to the present Government.

Mr. Randall: The hon. Member for Havant implied that he was talking about this Government, because he referred to the NEDO report in which strong comments are made about the Government's role in the information technology industry. The report says that the information technology industry is in crisis, so one cannot be other than alarmed about what is happening in that crucial industry.
I was particularly disturbed when, in February, having asked the Leader of the House during business questions whether the Government would be prepared to put aside some time to discuss that report, I drew a blank. That shows the Government's lack of interest, and their complacency towards the industry.
The industry is important. We must draw important conclusions from the current balance of payments situation. The industry has gone rapidly into a balance of payments deficit. The reason is that there is so much import content in many of the products that we sell, and our own industry has not been able to respond to the intense competition from many of the foreign-owned multinationals.
However, the industry is growing fast. The figures in the NEDO report show that in 1983 world demand for IT products was about $50 billion, going up to about $150 billion by the early 1990s. By any measure, that is a rapid rate of growth. The problem for the United Kingdom industry is that it is not getting its fair share of the cake. What is happening in the British IT industry is reflected in the national economic situation. We know that the Government have devastated British industry. The facts are there. Only a fool would argue against that. What the Government have not done for IT is part and parcel of the economic and industrial disaster that has been wrought in this country. Our information technology industry is dying before it has had the opportunity even to blossom.
What have the Government done? I shall be positive about it. They had their 1982 IT programme. The Parliamentary Under-Secretary was influential in that programme. One must accept that the Government were successful in improving awareness in this country of what


information technology is about. The decisions made by the Government on ICL were accepted as being basically good for the country. Otherwise, I am sure that ICL would have gone to the wall. Such things must be encouraged.
The Government have a broad range of schemes. The Minister touched on them during his speech. There is the support for innovation programme, the microelectronics application programme, and all the others. People in the industry tell me that that there is a wide range of schemes, but it is too wide. It is baffling for the small firms. The complexity of applications turns away many small companies, and results in an automatic "No." I hope that the Minister will take up that matter, because I believe that there is a genuine requirement for simplification of many of the present schemes.

Mr. Pattie: The hon. Gentleman will be aware that my hon. Friend the Parliamentary Under-Secretary with responsibility for small firms, the hon. Member for Rossendale and Darwen (Mr. Trippier), repackaged about 64 schemes into four separate schemes to meet that very point.

Mr. Randall: I am glad to hear that. My point was the result of discussions that I had with people with knowledge of the industry.
I should like to refer to the 21 pilot projects. The Parliamentary Under-Secretary and I debated that subject in an Adjournment debate that I introduced just before Christmas. The projects are good stuff, but the scale is too modest. Because the rate of change is so rapid, because international competition is so fierce and because the United States and particularly Japan are consolidating their positions, it is tinkering with the matter. We must think about it on a far grander scale.
We have Alvey, which is to be encouraged. However, there are administrative problems and unknowns about the final outcome and how we convert it into a real product that will enhance the industry and create jobs. Similar things can be said about ESPRIT.
What should the Government do about information technology? I feel that the Government should play a much stronger role as a customer rather than a sponsor. There should be a coherent and powerful procurement policy in the public sector. I should like to see all Government Departments, including the Department of Health and Social Security, the Department of the Environment and the Ministry of Defence, take up the use of information technology to a far greater extent. I go further and say that we should have a really big scheme, with the objective of creating the best public administration systems in the world. I get tired of our always having to match the competition. We now have the opportunity to go ahead and do more.
If I were a Minister, I would bring in the permanent secretaries and say, "Draw up plans that will totally transform your Departments." That would be important for the country and good for public administration. It would also be good for the morale of the Civil Service, which is very low at the moment because of all the cuts that have been taking place for a long time. We must think far bigger. I would adopt the Kennedy style. He said that the Americans would have a man on the moon in the 1970s. I would say that we shall have the best public administration systems in the world by a certain date.
If we did what I am suggesting, there would be a marked improvement on the demand side of the industry.

Many of the policies are on the supply side — for example, structuring and research. That must go on, but much needs to be done on the demand side. If any Conservative Member is prepared to tell me that if the next Labour Government were to do that it would be an irresponsible use of public money, I shall sit down and give way. Of course it would not. It would be eminently sensible. I hope that when the Labour party forms a Government in two years' time, it will do just that.

Mr. Baldry: Will the hon. Gentleman give way?

Mr. Randall: I shall not give way, because I am running out of time.
In the short term, there would be a boost to the IT industry as a result of such a policy. The industry would then be able to respond to large projects. It would be able to deliver on time and with far better quality products. That is what happens in the United States. Public money goes into such projects there. I could quote numerous examples of the way in which the Americans have done that, but I do not have the time. That is what we should do. Even our local authorities have a role to play. For example, the Greater London council—

Mr. Deputy Speaker (Mr. Harold Walker): Order. The hon. Member has exhausted his 10 minutes.

Mr. David Evennett: I am pleased to be able to take part in the debate and to support the amendment in the name of the Prime Minister, as well as what was said by my hon. Friend the Minister for Information Technology.
I was amazed by the speech of the right hon. and learned Member for Monklands, East (Mr. Smith). Its content was pure, red-blooded Socialism. If his policies were carried out, they would have a devastating effect on our industry. I was disappointed by the comments made by the alternative Opposition — the alliance. The constructive comments in the debate have come from Conservative Benches, which is encouraging.
My constituency of Erith and Crayford has suffered a major change, with the decline of the heavy manufacturing industries and the development of the new technological industries. We must accept such a change. It brings less employment, but it is exciting in many ways because it represents the future. It is the future that we should discuss, not the past and the solutions that come from the past. We have seen them too often.
I remind Opposition Members that historically our industry and our entrepreneurial spirit made our country wealthy — not Governments, politicians or more and more money pumped in by the taxpayer, but the initiative and entrepreneurial spirit of the industrialists. That is what we must generate today. That is what we must recover. I was impressed by the fact that my hon. Friend the Minister not only listed the Government's efforts to encourage industry but described how they are trying to instil a new spirit into industry in connection with the new technology. [Interruption.] Hon. Gentlemen may laugh. They are not, like us, interested in creating more wealth for the country.
I totally support what my hon. Friend the Member for Eastleigh (Sir D. Price) said about the lack of status accorded to scientists and engineers in the past. I hope that that regrettable attitude will change within the next few years.
Education and training are vital. I was disappointed that the hon. Member for Stockton, South (Mr. Wrigglesworth) did not develop that theme. It is vital that we should consider education, training and cost. Those are major factors in meeting the demands of the new, high-technology products. We need good, educated workers trained to produce and utilise the new equipment. I believe that the Government have shown that they are willing to play their role in that area, and, indeed, that they have done so successfully. Without the necessary skills, we would be unable to compete in the production of modern technology or to make the best use of its many and varied applications.
A wide range of skills is required. We need to train people in basic keyboard skills so that they can operate computers. We also need graduate scientists, technologists and engineers to carry out innovative research and to develop commercially viable end products. We must create products that people are willing to buy on the world markets and at home.
Much is being done to encourage the learning of such skills in schools. Many pupils are learning to operate micro-computers, many of which are provided with funds from the Department of Trade and Industry. Further changes in tuition in mathematics, sciences and craft subjects mean that pupils receive an education that is better fitted to the needs of modern society. In addition, schemes such as the technical and vocational education initiative ensure that pupils are well prepared and able to compete in a rapidly changing world. Beyond school, the Government are encouraging more students to take degrees in technological subjects to meet the needs of the sunrise industries.
We have heard too often of the shortage of skilled people in industry. That shortage is regrettable. It must and will be made good.
As well as the educational initiative in the schools, universities and polytechnics, there is a need to encourage training to meet the changing needs of industry. The Government have made clear their wish to see the training provided by the Manpower Services Commission made more relevant and adaptable to the needs of industry. That positive move is to be welcomed. It is especially important to retrain those employed in dying industries. We must accept the fact that some industries are dying. The Opposition, when in government, wanted to pump more and more money into dying industries. That is why, in the past 20 years, we have not been able to release resources for the dynamic new industries.

Dr. Norman A. Godman: rose —

Mr. Evennett: I am sorry, but time is short.
We must retrain manpower from the dying industries to take up the challenge of the new industries. That is the only way in which we can create more jobs.
The Government have some role to play, but it is distressing to be told that only the Government have a role. That is what the Opposition Front Bench tells us all too often. When Opposition spokesmen say, "The Government must do such-and-such", they are talking about taxpayers' money. Employers have a major role to play. They must take more responsibility for training.

Many of them are keen to do so. They must make use of the facilities offered by the Government and build upon them.
One of the strengths of many of our overseas competitors is the extent to which they are involved in training and retraining employees within the firms. Employees, too, and the unions that represent them have a crucial role to play. They must be willing to move away from outmoded and wasteful training methods. Mention has been made of the trade apprenticeships, which seem to me to be more concerned with the time served than the skill and confidence gained. That is not acceptable.
If greater training is to be provided by employers, those receiving that training must adopt a more realistic attitude to the costs and other burdens that such training imposes on the employer, and must therefore be willing to accept a lower rate of pay during training. They will benefit in the long term.
The cost of training cannot be ignored any more than any other cost in industry. Ultimately, costs determine the price at which the goods can be sold on the market. If the customer will not pay the price, there will be no industry and no goods for sale. We are competing in international markets where products are keenly priced. Unless our costs are kept as low as possible, we will not succeed in capturing an increased share of the world market.
Despite recent improvements, our costs, especially labour costs, do not compare favourably with those of our competitors. That is worrying. The Opposition will not accept the fact that trainees should be paid at a lower rate. When inflation was running riot, it was acceptable for workers to want higher wages; they did not know what next year would bring. As my hon. Friend the Minister said, memories are short. In the 1970s, inflation ran riot. Nowadays it is under control and we need realistic wage settlements. We should congratulate the Government on their efforts. For the first time in 20 years of decay, we are looking to the future and the new industries. That is to be applauded and not criticised. We could all, of course, make many suggestions about slight improvements, but the basic principle is what we are discussing today. We are looking for an improvement across the board in our economic performance. We therefore need more investment in the new industries, much retraining, and changes in education.
The Opposition claim that industry cannot rely on the Government. They are completely wrong, as usual. This is in fact the only possible Government to which the country could look to encourage our industries and our future. The Opposition would look backwards to the dying industries.
Industrial success demands a sound economy. We are on the right course. We would like to see a few alterations, and we will discuss them at length in future in debates on particular subjects. However, to a greater extent than for many years, we are looking forward, and that is a great improvement.

Mr. Paddy Ashdown: My hon. Friend the Member for Stockton, South (Mr. Wrigglesworth) has outlined the attitude of the alliance to the present situation and said what it would seek to do about it.
I should like to concentrate on a single topic that was raised, towards the end of his speech, by the hon. Member for Erith and Crayford (Mr. Evennett). He talked about the


importance of a free trade system for our technologies. As has been said, the new technology industries are fundamental to our future. A fair system of trade to allow our high technology industries to operate normally and to export effectively is therefore crucial.
However, our high technology industries are now being severely inhibited from exporting effectively, not because of the laws of this country, but because of constraints placed upon them by our principal ally, the United States. I shall show how the United States has sought and continues to seek to impose United States laws on British firms operating in Britain in a way that not only prevents them from trading effectively, but effectively undermines the sovereignty of Parliament.
I have spoken before in the House about the now infamous IBM letter of 22 December 1983 which required purchasers of certain IBM machines to ask the permission of the United States Government before moving those machines, even within the United Kingdom. I asked the Government to intervene in the matter to protect British firms and British sovereignty, but they have done nothing —or at least nothing effective.
The IBM letter still stands unrescinded, and it remains operative. But, worse than that, other American firms have now joined IBM in similar actions. A more recent letter which was sent to United Kingdom firms by Texas Instruments has come to light. It states:
We seek an assurance from you, our customer…that your Company will not, without prior authorisation, export technical data to any destination or country which is prohibited under the laws of the USA.
That includes countries, such as Austria, Sweden, Switzerland and Spain, with which the United Kingdom has perfectly ordinary trading relationships. The letter goes on to define technical data in terms which make it clear that software is included, and even data—to quote the company's coy phrase—of "an intangible nature". That relates to data held in people's heads. In other words, anyone with such information in his head must presumably ask the permission of the United States Government before travelling from Britain to one of the nations prohibited under United States law. Similar letters have been sent by other United States suppliers, including General Instruments and Microelectronics.
The high technology industry is international. Almost every high technology item manufactured in Britain and elsewhere contains components made in other countries. Indeed, it is calculated that non-United States manufactured high technology goods are 60 to 80 per cent. dependent on United States-produced components. In effect, therefore, as many as 60 per cent. — perhaps more—of British manufacturers must seek a licence from the United States before exporting their goods to many destinations.
I should make it clear that these conditions are placed on British firms, not as part of their contractual requirements with their United States suppliers. That at least would be understandable, if difficult to enforce. No such contractual terms have ever been required. Therefore, these are impositions placed directly on United Kingdom firms by the United States Government bypassing the United Kingdom Government. Is that not an infringement of our sovereignty?
What are the Government doing to protect United Kingdom firms and industry from such action? The

Government have gone through the ritual motions of protest, but none of the Secretary of State's wringing of hands has had any effect, as I shall seek to show.
I accept the need to place restraints and controls upon the export of items, especially high-tech items, which, if they fell into the hands of an enemy or potential enemy, could prejudice security. But surely it is for the United Kingdom to decide on such controls, not for the United States to impose them unilaterally on British firms over the head of our own Government.
It is apparent that the United States Government are prepared not only to impose the writ of their own law on British industry, but to back up what they see as infringements with heavy sanctions — again directly imposed on British firms in Britain for infringements of United States law, not British law.
The most famous recent example relates to the Leeds-based company of Systime, until recently a wholly-owned British firm. Systime fell under suspicion of being involved in trading from Britain with countries of which the United States disapproved — Iraq and Pakistan —although they are nations with which Britain has perfectly normal trading relationships. The company was subsequently threatened by the United States Department of Commerce—without an opportunity to put its case—with total denial of all supplies of components from the United States. In effect, that would have meant the death of Systime. Systime agreed to negotiate terms with the United States Government, believing, as a result of talks at the highest level with the Department of Trade and Industry, that our Government either would not or could not effectively come to its aid. It is a matter of public record that the company has now agreed to pay the United States Government a "fine" of $400,000, and it is likely that it will have to accept terms and conditions which will include giving details of all United Kingdom customers to the United States on a regular basis.
I repeat that at the time those sanctions were imposed Systime was a wholly-owned United Kingdom company, operating in and from the United Kingdom. It had broken no United Kingdom law. In the absence of effective action by the Department of Trade and Industry, it had no option but to accept the United States fine and conditions or to go out of business.
I have several questions for the Minister. Why in this matter has the Minister abrogated the sovereignty of Parliament to the United States? Is this an appropriate way for an ally to act? How can he pretend to be interested in encouraging exports from high-tech industry when he will not act to stop the imposition of restraints on those imports by other, more powerful, nations?
Unhappily, Systime is not an isolated case. Even ICL, Britain's foremost computer company, has been similarly affected. It has been fined $15,000, and its exports have also been made subject to United States control. Here again, it was exporting to a nation with which Britain has normal trading relationships, but of which the United States Government disapproved.
United States export licences are now often required by British firms exporting British manufactured goods to EEC countries. In some cases, those goods contain as little as 2 per cent. United States-made components. Such constraints on inter-EEC trade clearly infringe EEC laws. That matter is currently being investigated in Brussels. Why are the United Kingdom Government not taking similar action?
It is now clear that the United States Government are prepared to back up their investigations and action by using United States Government officials within Britain but without the British Government's permission. That much was admitted to me in a parliamentary answer on 19 December 1984, in which the Minister agreed that a United States official, Mr. Jack Lacey, had visited and investigated a British firm without any reference to, or permission from, the British Government. There have been other similar incidents.
In a speech in Palo Alto, California, in April 1984, the then director of the CIA said that the CIA had a list of 300 black-listed firms in Europe. Shortly after that speech, I telephoned the CIA in Washington, and it confirmed that British firms were included in that black list. Is that the appropriate action of an ally? How did those British firms get on that list? Perhaps the answer lies in a conversation that I had with Mr. Richard Perle earlier this year, following a television debate. I asked him how on earth the United States could use its Customs and Excise to enforce its regulations abroad. He said that in his view this was a job not wholly for Customs and Excise, but also for the intelligence services. Is that how this information on British firms reached the CIA's black list?
There is one further twist to this saga. The United States has now decided that the limitations on the export of intangible assets—the assets in people's heads—entitles its Government to place restraints on open scientific conferences. A recent open conference on optoelectronics held in the United States was summarily closed by the Pentagon. Foreign scientists, including, I believe, British ones, were excluded from meetings, and the United States scientists who were allowed to attend were required to sign control forms.
I understand that the British Computer Society has already written to the Minister expressing its deep concern over this matter, but that it has yet to receive a reply. I also understand that tomorrow it will be making a statement expressing its concern on the matter. Given the previous action that I have already mentioned, will we now see United States pressure to exercise similar action to control the movement of people, as well as hardware and software, in Britain?
The high technology industry uses a buzz word to express what it fears most. It is referred to as FUD—fear, uncertainty and doubt. The Government have allowed such a climate to prevail over high-tech exports —fear of unilateral extraterritorial action by the United States against British firms operating in Britain within British law; uncertainty about what, if any, action the Department of Trade and Industry will take to protect them; and doubt about what to do next.
The Minister can paint whatever rosy pictures he wishes about our high-tech industries. He can call on them to export until he is blue in the face; he can institute as many export for jobs seminars as he likes; but unless he and the Government are prepared to stand up for British high-tech firms which wish to export, he will find that Britain will become just another technological satellite of the United States and that the trading laws under which our industry exports are those which come not from Ashdown house but from Washington.

Mr. Roger King: In a week or so the eyes of the world's motor racing fans will be centred upon a world famous spot which stages the oldest motor race in the world, the Indianapolis 500. There will congregate many aspirants for the coveted prize, the richest prize in motor sport. This year 79 cars have been entered for the 33 start places. Not many Japanese cars will be found there. In fact, there will be none. Not many French, German or Italian cars will be there; again, there will be none. There will not be many American cars; in fact, there will be four. The remaining 75 entrants are all British-built racing cars.
The same happened last year. Of the 33 starters, 29 were British-built March cars. All 14 finishers were British-built. Sometimes we are our own worst enemy. We spend our time criticising ourselves instead of compli-menting ourselves on some of the great attributes that we have as a country.
In formula I racing car design we are world renowned for our expertise. Our engine technology has been unsurpassed, with the Cosworth engine having powered almost all the formula I winners for nearly 15 years until it was superseded by later designs. Robin Herd, one of the chief designers of March racing cars, has just received the 1985 Duke of Edinburgh award for design for the excellent work he has done overseas. That was a well-deserved award. In the design of racing cars, surely the highest form of vehicle transportation, we are pre-eminent.
In many ordinary bread-and-butter car designs we are also pre-eminent. Lotus, Jaguar and TVR—three British manufacturers—have announced record sales. Lotus has announced substantial profits. Those are motor engineering companies with a world renowned reputation; they are building products wanted by the market not just in this country but overseas.
I cannot help but be depressed when I hear Opposition Members, and in particular the Leader of Her Majesty's Opposition, no doubt crawling around for county council and shire county votes in the recent election, telling the workers in my constituency, who have built up a good record of reliability and product quality, that 5,000 jobs are likely to go, that no more money is coming from Government and that the whole industry is likely to fall flat on its face. They were referring, of course, to the so-called corporate plan of BL and principally to the future of the plant at Longbridge in my constituency.
The facts do not fit that argument. In the last three months a 10-year record has been achieved by Austin Rover. A total of 142,507 cars has been built, with a 19.3 per cent. penetration of the United Kingdom market. The Austin Montego is ahead of the Ford Sierra in sales; that has been achieved through very hard work. The new Rover 200 series built at Longbridge has also reached the top 10 and accounts for 2·2 per cent. of the United Kingdom market.
The Austin Rover group is running at 98 per cent. of capacity — an unprecedented level for any British automobile company. That means that if it wished to increase output or to start assembling Honda cars on its assembly lines it would have to take on extra workers. In regard to workers, it is useful to point out that because of the quality of the products Longbridge, far from getting rid


of people, has taken on no fewer than 1,365 new employees since the beginning of January last year, so a great deal has been achieved.
When one listens to the Opposition one would imagine that no investment had taken place at Longbridge. At the same time as Opposition Members talk about 5,000 jobs being lost, a new gearbox line has been installed to build the Honda gearbox and a new O series diesel engine line has been prepared for the diesel engine being produced in conjunction with Perkins. That is reckoned to be of an advanced nature and acceptable for today's modern motoring style.
We know about the new S series engine which powers the Maestro and the Montego, and the new O series turbo engine which powers the fastest saloon car currently available at under £10,000. Much work is being undertaken at Longbridge and no one should go around spreading doom, gloom and despondency.
When it comes to new investment in the A series replacement engine one cannot take the requirements of Austin Rover in isolation. Ford and Fiat have decided to get together to produce another generation of cars. Those are Europe's two largest manufacturers, which account for 27 per cent. of the European market. If they find it necessary to form a partnership to develop the next range of cars, surely it makes sense for Austin Rover to look beyond itself for a new generation of engines for its smaller saloon cars. It is hardly surprising, therefore, that the management has decided to review the corporate plan in line with the requirements that it envisages the market will want and what it can afford over the next few years. The partnership with Honda, which is essential for the well-being of the company, has produced good news recently. It can be developed much further so long as it is not a screwdriver job but a joint working venture.
We look forward to increased sales afforded by the entry of Austin Rover to the United States, where it is aiming to sell 20,000 cars in 1987. One must look with dismay at what is happening in Spain. This year some 90,000 Spanish cars will come to this country, yet we are allowed to send only 3,500 Austin Rover cars to Spain. The market is there. The company has just exhibited at Barcelona with one of the largest stands in the show. It could sell 20,000 cars in that market but it is not allowed to do so because of the import limitation. That is where jobs could be found. I have already mentioned that the company is operating at 98 per cent. of capacity. If it could gain access to the Spanish market that would almost inevitably lead to the creation of extra jobs.
It is not necessarily the Government but the customer who buys the product who will provide the investment. We have just heard today about the demise of the Philips washing and drying machine industry in this country. I have just bought a Philips drying machine because I believe in buying British and because it is good equipment. How many Opposition Members have bought Philips drying machines and washing machines? They prefer Candy, Zanussi and all the other foreign manufactured machines. If we want manufacturing to stay in this country, if we want products to be built in this country and if we want the investment, we must support those products by buying British, because they are the best quality and the best price and give our people the best opportunity for their future.

Mr. Peter Pike: I can claim two credentials for speaking in the debate. First, I represent the constituency of Burnley in which people depend heavily on work in the manufacturing industries. Secondly, until I was elected a Member of Parliament in 1983 I worked in manufacturing industry on the continental shift system, changing shifts every three days. I was also a shop steward in the Mullard group, part of Philips, to which the hon. Member for Birmingham, Northfield (Mr. King) has just referred.
I know how the work force was reduced in that factory from 3,500 to 1,200 during the 10 years that I worked there. New technology and new methods were introduced. Obviously it was an extremely difficult period, but that industry survived because of the great understanding between the unions and the employers. One point that should emerge from today's debate is that we should give every encouragement to management to involve the work force more in the decisions that are taken. Many of the problems in industry arise from the failure to have adequate communications with the work force If that consultation takes place and if the work force knows what is going on, it will co-operate with change, however difficult that might be. It is better to have job security for fewer employees than to have no job security at all. The trade unions and the employers have a mutual interest in that respect.
I recognise that if we are to compete in the world's market places we must accept that new technology must be introduced into our industries. If we are to compete on equal terms, we cannot adhere to old-fashioned methods and equipment.
As I have said, I was employed by Mullard, which is part of the Philips group, before being elected to this House. The company manufactured cones that were used on the back of television tubes. As a result of co-operation between the management and the unions, we were able to make them so efficiently and so well that we could make in about six to eight months all that we needed for a year. That was all well and good while we were allowed to export the surplus cones, but suddenly the parent company in Eindhoven decided that Mullard would no longer export the cones and that the export trade would be left to the Aachen glass factory of the Philips group. As a consequence, the section of the Mullard work force producing the cones had to be made redundant. Every cone that is incorporated in a television set that is made in Britain has to be imported from the continent.
That is an example of one of the difficulties that many British industries face when they are part of a multinational group. The group's decisions are not taken in Britain's national interest, and nor are they taken in the best interests of British workers. The multinational group decides where it wants to make profit or where it wants the job to be done. The decisions of multinationals can be contrary to the best interests of Britain.
I have lived and worked in an old textile town that had to accept transformation in the early years after the second world war from textiles to new industries. I am well aware of the adaptability of the work force, especially in my part of north-east Lancashire. The area has seen the appearance of new industries. Lucas Aerospace is at the fore front in my constituency. It supplies many of the world's major aerospace companies but every company overseas with


which it is in competition receives far more Government assistance than it receives from the British Government. There is no doubt that the management and work force at Lucas Aerospace at Burnley are first class and that they produce first-class products. However, if they are to win contracts and survive, they must be able to compete on an equal basis with their competitors from abroad. The Government should give more consideration to that factor.
There is a new industry in my constituency which has been formed by two people who went to school in Burnley. Their company, AMS, will soon move into a new factory in the Burnley enterprise zone. The company makes excellent audio equipment which is exported throughout the world. The average age of the employees is less than 23 years. Unfortunately, there is little of that sort of work in Lancashire and the regions. Most of the industries of that type are concentrated in the more prosperous south-east. The company happens to be in Burnley because the two people who run it were born and educated in the town. The company has, for the second year in succession, won a Queen's award for industry this year. That is a sign of the way in which people in a constituency such as mine are prepared to accept new types of job if they are given the opportunity to do so.
The Government have failed to capitalise on many of Britain's leads. One example is our ability to make substitute natural gas. We could gain a world market in our capability to produce the necessary equipment for the production of substitute natural gas if the Government were to instruct British Gas to initiate a programme of conversion. I accept that the need for substitute natural gas may not be with us, but it would be in the best interests of our energy policy if we were to start the conversion now. We could gain tremendous world markets if the Government were to give the go-ahead to British Gas for that project.
Britain has a lead in cable and satellite television broadcasting. The Minister who was responsible for the industry accepted that that was so when I asked a question to that effect two years ago. However, because decisions have not been taken in time, we are allowing the rest of the world to catch up with us. Ultimately we shall be overtaken and the rest of the world will enjoy the advantage and not our industries.
In my constituency the unemployment rate is slightly over 13 per cent. Most of my constituents, whether they are employers or trade unionists, believe that the Government have no policy for industry and that they are not interested in manufacturing industry. That judgment can be arrived at from the answers that Ministers have given to our questions. They suggest that a trading deficit on manufactured goods is not of great consequence. They refer to invisible exports and say that we must view the picture overall. I accept that invisible earnings are important to our financial well-being, but we are a manu-facturing country. We have depended on manufacturing industries in the past and our future will similarly depend upon them. If we are to survive, we must ensure that our manufacturing industries are able to compete. If we do not recognise that, there is a danger that we shall become a satellite of other countries.
In the car manufacturing industry, for example, there is a danger that we shall end up with only an assembly industry and that the development of new cars will not be

concentrated within Britain. If that is followed by a further recession in the motor trade, Britain will suffer the major blow and not the countries that are involved in development work.
I have a great fear—I know that it is shared by many of my constituents—that when North sea oil and gas are depleted, and when the Government have no more assets to dispose of, those, in work will enjoy an improved standard of living and all those who are unfortunate enough not to be in work—the unemployed, the retired, the sick or the disabled—will see a fairly rapid decline in their way of life. We are already moving in that direction. When announcements are made on the future of the welfare state, I am sure that they will prove my predictions to be right. However, we have shown in the past an ability to develop new schemes. The Government should encourage both sides of industry to ensure that we go forward.

Mr. Charles Wardle: There is a word in the Yiddish language which defies straightforward translation into English but which is relevant to the nature of the debate. The word I have in mind is "chutzpah", which, loosely, means barefaced nerve. An American authority on the Yiddish vocabulary once illustrated its meaning by the story of an armed mugger who cried "Help" while beating up a defenceless person. In moving the motion the Opposition have provided the House with a classic illustration of chutzpah when we consider the permanent damage that was sone to industry under the Labour Government.
Over the past six years a vast amount has been accomplished to restore the foundation of Britain's industrial welfare and prosperity and to create the necessary conditions for future growth. The fundamental weaknesses that were allowed to develop in the middle and late 1970s mean that it will be some time yet before all the structural changes that are taking place in industry are completed and before the transition from a predominantly traditional manufacturing base to one that is fully reliant on new technology is achieved.
In spite of the fact that this country's economic growth rate is among the highest in Europe, that productivity has improved, that company profits are increasing and that hundreds of thousands of new jobs have been created in the private sector, there is no denying that industry still has visible scars from the recession that began in 1980 One has only to travel to the west midlands to witness the effects of that recession upon the industrial landscape. But the savagery of the recession's impact there has to a very considerable extent been the result of the Labour Government's policies for industry in the latter half of the 1970s I am not suggesting that that Government were solely to blame for what happened. Management, trade unions and previous Governments have to take their share of responsibility, too.
Not only was inflation allowed to soar in a manner that priced British goods beyond all hope of competitiveness; there was the iniquitous tax on jobs and the absurd bureaucracy of the Price Commission. Even the measures introduced by the then Chancellor at the end of 1974 in his emergency Budget—and welcomed, it has to be said, by management at the time—to provide stock relief and improved capital allowances for industry had an inflationary effect. Either that Labour Government did not


understand or did not want to face up to the problem that was eating away at British industry, which was that pay increases were far outstripping productivity so long as the inflationary spiral continued unchecked.
Hon. Members are more than familiar with the events that followed, but the effect of Labour's approach to industry in the 1970s meant that when the recession emerged at the back end of the steel strike early in 1980 a great many manufacturing companies were overloaded with stocks of finished goods, carried on their shelves at inflationary prices that simply could not match foreign prices in the competition for market share that intensified as the recession grew worse. That situation called for large cutbacks in the number of employees, in stocks and in capital equipment and the closure of many factories which it will take a great deal more time to replace.
There is little doubt that inflation made much worse what may, anyway, have been an inevitable process as this country moved towards a second industrial revolution with the advent of microchip technology. For a generation or more management had not done nearly enough to secure new markets with new products in order to replace what had been the comfortable captive markets of the old empire and commonwealth and even for a short time, immediately after the war, the virtually captive markets of Europe. Nor had management or successive Governments paid nearly sufficient attention to changing technology.
The roots of the decline go deep but inflation greatly exacerbated an already difficult situation. Therefore, in 1979 there were no soft options left. There are still no soft options. In order to give industry the best chance of recovery, there needed to be a radical reform of the structure of our economy and of our attitudes to work.
During the past six years a great deal has been done. Inflation has been brought down. Public spending is under control. It is at record levels, but it is nevertheless under control. Each year £55 billion is spent upon capital investment, £22 billion of which is investment in the public sector, on top of which another £5 billion is spent upon maintenance. Unnecessary controls have been abolished. There have been tax reforms, national insurance changes, incentives for small companies, privatisation, wider share ownership, legislation that has brought flexibility to the trade union movement and training incentives and moves that will suitably revolutionise our approach to education for the computer age that lies ahead. All of these bold and constructive measures have helped to create the climate without which industrial recovery could not have begun. It has begun and it will continue step by step, provided that the essentials of the present policy are maintained and properly understood by the public.
What else, if anything, can be done to speed up the process of industrial regeneration? I would suggest to my right hon. Friend the Secretary of State for Trade and Industry that a number of practical improvements could be made which do not involve a change in strategy and do not call for a greater injection of public money. Rather, they call for a change of approach on the part of those who participate in the industrial scene. I except for the moment the trade union movement, because changes have already taken place there. Changes are required elsewhere as well.
I turn first to the role of big companies. It is not generally recognised that the relationship between big companies and their smaller suppliers is crucial. It is a symbiotic relationship that works well in some instances

in this country—for example, at Marks and Spencer and at the Ford motor company, with their various component suppliers. However, it does not work well in all other cases. One finds that it works very well in Japan. If one goes where most foreign visitors do not tread—that is, to the component suppliers of the Japanese automotive industry —one one finds a very different scene from that which pertains in the big automotive factories. The small companies work to a very strict regime in which wage scales are much lower. They work to a tight schedule, with deliveries twice a day.
The same sort of pattern applies much more generally in the United States. Those conditions did not apply during the recession at British Leyland. It may be that the then chairman of British Leyland did a great deal to change attitudes among the trade union membership as to the future of that company and to change the public perception of that company. What was not achieved was any improvement in middle management, particularly in buying management. It let down many smaller companies which might otherwise have survived and come through the recession.
While I am dealing with management, it is fair to say that management has taken a terrible beating in the debate about industry during the last few years. However, it should also be recorded that the old style of management, starting with chargehand, foreman and shop manager all the way through to works manager and production director, has been swept away—and rightly so. There is good, young management in its thirties and early forties in British industry, and it should be given a chance. I suggest to my right hon. Friend the Secretary of State and to other members of the Government that they should go beyond the list of the great and good when they are looking for extra management talent. It is available. I find all too often that hon. Members, as well as those in the City and in the media, tend to be dismissive about management and that those who are dismissive about management have never employed anybody, or made anything, or made any money at all, as was pointed out by my hon. Friend the Member for Eastleigh (Sir D. Price). Therefore, British management ought to be given a chance. It ought to be brought alongside officials in Government, not in any dirigiste way, not in any corporatist way and not to replace officials but to inject a practical flavour.
There is plenty of money in the City of London for industry. There is plenty of money for the bigger companies, which can produce a sophisticated case. There is also plenty of money for the smaller companies, but I am not convinced that it always reaches them. The most practical way to reach those companies is through the high street banks. The managers of high street banks have directed a great part of their funds towards shoring up companies which have been in difficulties, and towards looking after individual banking accounts when those individuals have lost their jobs and found themselves financially stretched. Despite some of the advertisements, I believe that the banks are timid about approaching smaller companies, but small beginnings today will make the large companies of tomorrow. It is not the chap who walks into the City with a pat argument who will be successful but the chap who goes to see his bank manager in the black country and says, "All I want to do is to buy a piece of second hand machinery, carry out a finishing operation and pass it on to the next chap down the road."
There is a prevailing portfolio approach to investment. It is an asset cover and balance sheet approach. It has got little to do with competitive advantage and the dynamics of industry which the Americans, the Japanese, the Germans and even the Swiss demonstrate so effectively.
Finally, research and development will remain crucial. We have an excellent record. The Government have ensured a fourfold increase in research and development investment, but the gap is still huge. I hope that my right hon. Friend the Chancellor of the Exchequer and the Secretary of State for Trade and Industry will keep this in mind. It is a gap that must be bridged. These are practical aspects within the framework of existing policy which will do much to regenerate British industry and allow small beginnings to grow extensively.

Mr. Michael J. Martin: I owe you, Mr. Deputy Speaker, and the House an apology for not being in the Chamber throughout the debate. The reason is that today I received word that 1,200 jobs are to be lost in the British Rail Engineering Limited workshops, the only major employer left in my constituency. During the next two years the work force is to be reduced to about 460 personnel, both salaried and wage staff. It is a blow for any hon. Member to receive such news. It is harsh in any community which has suffered a great deal from redundancies, because there have been several closures in my constituency since the turn of the year. Many of the closures and redundancies are due to changing technology.
Productivity at White Horse Distillers Ltd., the whisky company in my constituency, has increased. Industrial relations were second to none and sales were on the increase, but the company was able to obtain a grant of £8 million from the EEC and it built a massive plant on the other side of Glasgow. It was then able to produce White Horse whisky there. Only a few of the jobs in the old plant were transferred to the new one.
It is difficult to accept that taxpayers' money—that is what EEC grants are—is being handed to companies to enable them to throw people aside like rusty nails. Those people were loyal to the company for many years. Some of them have worked in the company since they were boys and girls of 14 years of age. They are now being thrown on the scrap heap, not because there are no orders but because the Government are handing out money for new plants. They are putting money into multinationals without giving any thought to the social consequences.
To return to BREL, 30 years ago my constituency was famous throughout the world for its railway engineering facilities. In its heyday, Springburn had about 10,000 skilled people employed in railway engineering. Within the next two years there could be as few as 460 I fear the worst, because 460 people cannot sustain an engineering facility. If British Rail invests in new engines—I do not dispute that it should—those new engines will not need the same maintenance and repairs as the old ones. The Government cannot then bury their head in the sand and say, "That is it. The facility will have to close. We shall not put anything else in its place."
This Government, like any other, when they go to the electorate always promise jobs. Why do they start to make excuses when they get into office with the majority that they want? They are well aware of the social consequences

of unemployment in a constituency such as mine. In a country as small as the United Kingdom one can get into a car in London and reach any part of the country within 24 hours. There is therefore no excuse for saying that the areas with the old industries cannot have new industries. If we can create new towns and enterprise zones in areas which only a few years previously were virgin sites, we can replace the industries which are in decline in the old communities.
If the Government forget about those old communities, they will have the problems which exist in Springburn and most urban areas—crime, drug addiction, vandalism and despair. The Tory party — the law and order party—keeps telling us that it will reduce crime. One of the ways in which it can do that is by giving young people hope for the future.
The main problem of the police in my community is vandalism. We can reduce vandalism by giving young people a worthwhile job which keeps them off the streets because they have to get out of bed early in the morning.
I have often heard the Minister say what a great thing YTS is. If our industries are declining and our young people cannot obtain work in the traditional industries and have to move away from the communities in which they were brought up, the least we can do for them is to give them a skill that they can take to another part of the country or abroad.
The building industry has three-year apprenticeships. There are four-year apprenticeships in the engineering industry. If the Government are serious about training, why do they not have YTS schemes that last for three years where an employer can take a boy or girl and give them a proper training? They would then at least have a skill.
When I was a young apprentice, a boy was sacked when he reached the age of 21 in some shipyards in Glasgow. That was not good, but at least the boy had a skill. That is all he was asking for. He had something that he could take to another part of the world. The Government are throwing away a golden opportunity by failing to examine our training schemes and by not allowing the good employers—there are many of them—to take on young people to give them the skills that they need.
Like many other hon. Members, I often go to seminars on information technology. I hear all the talk about floppy discs, megabytes and all the other jargon. In the Tea Room all Members can talk about is their computers and word processors. They are of no use to a company unless it has orders on its books. A company which employs one man and a dog does not need a computer to work out its wages bill, to order its material or to keep stock. All the fancy technology is useless unless we can obtain orders and have the industrial base that can use the technology. The only way that we can do that is by protecting our heavy industries.
The Minister should hang his head in shame, because we are frittering away our opportunities in the North sea. He knows as well as anyone that in the British sector of the North sea the ratio is about eight Scandinavian supply vessels to two British. It is the opposite in the Norwegian sector. The Norwegians look after their own. We do not protect our contractors, even in the North sea. There are small companies in my constituency employing 10 or 12 people which work for the North sea. I am told that when they get—

Mr. Deputy Speaker (Mr. Ernest Armstrong): Order. The hon. Member must conclude his speech.

Mr. Martin: Certainly, Mr. Deputy Speaker.
It is time that the Government did something to help the community and the work force in companies such as BREL in Springburn.

Mr. John Maples: I hope that the hon. Member for Glasgow, Springburn (Mr. Martin) will forgive me if I do not deal with the subjects to which he referred. There are a few points on which I shall concentrate in the short time available to me.
It is worth reflecting that prosperity and wealth are largely created by what people do, be they managers, entrepreneurs, trade unionists or workers. While the Government can and should help, their job is to create an environment in which business can flourish. Unfortunately, there are many cultural and historical reasons why we do not seem to be a productive and businesslike country. There is much evidence to show that that is changing, but it will take time to do so and, in the meantime, the job of the Government is to encourage change and, as I say, create an environment in which business can flourish.
The Government have had some success in doing that, but we have some serious fundamental problems, some of which have received attention in today's debate. For example, our share of world trade continues to decline, to a level which is now very disturbing indeed. The deficit which has developed in manufacturing trade should worry us greatly. All of that has combined in a pattern of relative decline, where the British economy has consistently grown at a rate less than the growth rate experienced by most OECD countries. Whereas in 1970 our GDP per head was about 7 per cent. above the OECD average, it is now about 10 per cent. below. That is what relative decline means, but at some point there must be a serious danger of it turning into absolute decline.
Those problems of world trade and a deficit in manufactured goods are associated with manufacturing industry. It is obvious that many jobs may come in the services sector of the economy, but we need a strong manufacturing sector, because our economy cannot survive on services alone. They may provide the jobs, but they will not provide all the wealth.
Much of the expansion that has taken place in service sector employment in the last 20 years has occurred in public services. That is unlikely to be repeated. In any event, the service industries need something to service. They need a domestic manufacturing industry to service, because there is not enough for them to do simply servicing imports or tourism. They need a domestic manufacturing base. That is illustrated by the fact that in the south-east of England both manufacturing and service industries have been successful in recent years. The service industries in that area have been successful because they have had relatively successful manufacturing industries to give them work.
Above all, we need manufactured exports to take the place of oil when it runs out. What shall we use to pay for manufactured imports when we no longer have exports of oil? I think, therefore, that our future lies in having a high wage, high productivity, manufacturing economy, producing and exporting sophisticated goods and services.

I shall suggest two areas in which Government policy can be not only influential but important in promoting the success of British manufacturing industry.
One is in the area of competitiveness in industrial costs. A substantial element of industrial costs is wages. Therefore, the need to keep wage rises in line with increased productivity is extremely important. The real wage argument does not demand that people's real wages should come down but that the increases in those real wages should reflect the increases in productivity that are taking place.
A substantial non-wage cost of employment is national insurance contributions paid by employers. I should have thought that there was an overwhelming case for reducing those across the board, or on a selective basis if the cost of doing so across the board was considered too high. Perhaps it could be concentrated on manufacturing.
One of the biggest cost barriers facing industry today is high interest rates. Those are largely caused by the United States deficit, although they are to some extent caused by the enormous expansion that has taken place in personal borrowing in the United Kingdom. One cannot help wondering whether we can continue a situation in which the interest rates that must be paid by British manufacturing industry are caused by two factors such as those. We should examine whether we can have some control over those factors.
The area of Government involvement in helping manufacturing industry in Britain is in the sphere of trade policy. While I am basically a free trader — if not something of a fair weather free trader—I accept that we do not live in much of a free trade world. All of the trade of the Eastern bloc and the Third world, and most of the trade of the middle eastern countries and Latin America, is managed and conducted, if not by their Governments, by Government agencies.
We also have trade practices by some of our major OECD trading partners—such as Japan, the US and France—which are far from fair in terms of free trade. Thus, the British Government must be involved, too. We need a partnership between the Government and industry to ensure that British industry beats the foreign competition. Nowhere is the role of Government in that connection more important than in trade policy.
One area in which we could be more active is in trying to reduce non-tariff barriers in the EEC. The fact that, 30 years after the Common Market came into existence, 27 forms are still needed for a lorry to go from Holland to Italy illustrates the point.
From our point of view, what may be more important are the national restrictions that are placed on the expansion of certain industries in which we happen to be particularly good, such as banking, insurance and airlines. The expansion of those into Europe is seriously restricted by national institutions. I should have thought that our net contribution to the common agricultural policy would be a small price to pay for the freedom of those successful industries to expand in the EEC.
The unfair trade practices from which we suffer are also practised by OECD countries. Many instances have been given concerning France, and we have an extraordinary arrangement with Spain under which it can export cars to this country through a 4 per cent. tariff barrier, whereas British cars exported to Spain go through a tariff barrier of about 60 per cent.
The real offenders in this scenario are the Japanese. We heard at the Bonn summit of yet another warning being given—a reading of the Riot Act—to the Japanese. I hope that it was not a ritual warning and that we shall be assured that on this occasion we told the Japanese that we mean to stop putting up with their nonsense. It is absolutely unacceptable that we should continue to have manufacturing industries in this country destroyed by their managed trade practices in circumstances in which we cannot do the same to them and their national regulations prevent us from exporting to them.
An area which I should think is ripe for action is the current expansion in the City involving Japanese banks and security companies. It is well within our power and that of the Department of Trade and Industry and the Bank of England to put a stop to that quickly. That should be an extremely soft point at which to exercise leverage on the Japanese. We cannot continue to play fair in a trading world in which everyone else cheats.
Services are undoubtedly vital to the country, to our standard of living and to our future employment, but they are not enough. We also need a strong manufacturing sector, and in today's world that means Government involvement in industry, but particularly in trade. Without that, we shall not have a high paid, high productivity economy, which is the only way forward to give us the standards of living and public services that we want.

Dr. Norman A. Godman: I must at the outset apologise for my absence from the Chamber earlier in the debate. Hon. Members will agree that my absence was out of character. It was brought about by circumstances beyond my control.
I agreed with the hon. Member for Lewisham, West (Mr. Maples) when he said that the economy needed a strong manufacturing sector and a thriving services sector. We must acknowledge that manufacturing in Britain has been in decline for some decades, and nowhere has that been more clearly experienced than in Scotland.
Scotland was pre-eminent for generations in shipbuilding, marine and heavy engineering, coal mining and textiles. Indeed, the textile industry was, and still is to some extent, a major employer. Everywhere there has been decline, and I concede that, because that decline has been taking place for three or four decades, it cannot be said to have started in May 1979. The picture is complicated, and mitigated to some extent, by the growth in Scotland of the information technology industry, by growth in the services industry and by the development of the offshore oil and gas industries.
Nowhere are the opposing tendencies of growth and decline more clearly seen than in my constituency. The traditional industries of shipbuilding, ship repairing and marine engineering have been in decline for a considerable time. Similarly, the cane sugar refining industry has experienced such a dismal decline that there is now only one refinery. On the bright side, however, there is the continued expansion of IBM — a company mentioned earlier in less complimentary vein by the Liberal spokesman, the hon. Member for Yeovil (Mr. Ashdown). National Semiconductor is also in my constituency and information technology is now the biggest employer in a traditional shipbuilding and marine engineering area.
The recent announcement of some 600 redundancies by Scott Lithgow was a further dismal blow to the Greenock travel-to-work area, which has a scandalous 24 per cent. male unemployment. The Secretary of State and I have exchanged comments about Scott Lithgow on previous occasions. I fervently hope that in the very near future Scott Lithgow will win Ministry of Defence and offshore orders. I am certainly not begging for orders or pleading for social security for the company. I believe that Scott Lithgow can win orders in both areas on merit. I certainly hope to see it building conventional patrol submarines next year.
The offshore oil and gas industry has saved Scotland from almost complete economic devastation, providing scores of thousands of jobs both directly and indirectly. Even there, however, mistakes have been made both by industrial organisations and by the Government. The chairman and managing director of one of our most successful companies in this type of activity, Mr. Ian Wood, recently said:
There is a strong belief in the United Kingdom fostered by both this and the previous Government that UK industry has done well in the development of North Sea oil. I personally believe that this is a dangerous myth.
Far too many of the successful North Sea performers are the incoming international companies who simply operate a local UK base to cater for North Sea oil. They are not building up genuine UK technology and know-how to be supplied in further expansion overseas.
Mr. Wood, one of the most successful Scottish business men in the offshore industry, went on to say:
Any present realistic assessment of the number of UK companies who have the know-how, technology and manufacturing skills to expand into the offshore industry worldwide would provide a pitifully small number nowhere near the level of presence and influence that should have been achieved from our privileged frontier starting position.
There are thus two main areas of policy objectives for the Government in the offshore oil and gas industries—the expansion of Scottish and United Kingdom involvement in the North sea and assistance for United Kingdom companies to compete more successfully in the international offshore market.
A further complication, to which I alluded in my opening comments, is the shift from manufacturing to service industries. No economy can grow simply on an expanding service sector when manufacturing industry is in decline. Both sectors are important. Manufacturing industry must be revitalised, which will lead to continued growth in the service sector. What is needed is home-led demand for the manufacturing industries and more direct Government influence on investment. That requires the development of economic and industrial policies which have as their object a successful manufacturing industry.

Mr. Phillip Oppenheim: I do not agree with every aspect of Government policy on high technology, but the Government are rarely given sufficient credit for their achievements in the past few years—the great success of the micros in schools programme, the aid for innovation, the expansion of training, and initiatives such as Itech. High technology training cannot be geared up overnight. First, we must have qualified trainers, of which there was a desperate shortage. The Department of Trade and Industry has helped selected companies. The Alvey programme in the United Kingdom and the Esprit programme in Europe are not perfect, and almost every


pundit in the industry thinks that he or she could run them better. Nevertheless, a huge amount of taxpayers' money and Government effort has gone into high technology.
Much of the greatly over-publicised gloom and doom about our information technology industry is unjustified. The recent NEDO report referred to huge deficits but entirely ignored microchips, of which this country is now Europe's largest producer. The report also failed to acknowledge that many imported components, which appear in the trade figures as part of the balance of payments deficit on our high-tech trading account, are incorporated in electromechanical equipment such as machine tools and re-exported but do not reappear on the positive side of the high-tech trading account because those exports come into another sector. The much-quoted high-tech deficit is thus somewhat misleading.
Recent figures have been relatively encouraging. In 1981 our deficit in the information technology sector was £1 billion. By 1983 it had risen to £2 billion, but preliminary figures for 1984 suggest that it has stabilised at that level. Indeed, 1984 production figures for the electronic and electrical engineering sectors show an increase of 12 per cent., data processing products an increase of 39 per cent. and components production an increase of 21 per cent.
This country is not alone in having a high-tech trade deficit. The United States, supposedly a high-tech high flier, had a $6·8 billion deficit in information technology products last year. Europe has not done much better. France had a £750 million deficit last year on computers alone. It is not surprising that many western countries are running larger deficits in the information technology sector because this is the main growth sector in most western economies.
Having expressed my support for what the Government have done so far, I believe that in some areas they may change their emphasis and do a little better. All too often, inward investment strategy is not sufficiently selective and we rush headlong to create jobs in problem areas, often supporting the entry of overseas companies into our markets to compete against British firms.
Recently, Micro-Image Technology, in my constituency, which is a company owned by Laporte and has developed a good market in specialist chemicals for the microchip industry, and invested heavily in a non-development area to expand into reprocessing of scrap silicon wafers. No sooner had the company announced its investment plans than it heard that the Department of Trade and Industry was about to subsidise two American rivals to come to Scotland to compete against the company on its home market. That is somewhat ludicrous.
As international divisions of labour intensify and as it becomes difficult for any one country to have national champions for every product area, we should be trying to concentrate on areas where we can excel. Where we can excel we should not subsidise foreign competition, allowing it to come to this country. Where we cannot excel, it is to our benefit to import products as cheaply as possible—possibly incorporating them in products that are re-exported—or to encourage foreign firms to set up assembly operations in Britain.
To date, there has not been a clear direction of this sort in Department of Trade and Industry policy. We could excel in home and business computers, custom chips, some types of equipment for telecoms and certain components and software. We are unlikely to excel,

because of the nature of our industry, in mainframes, commodity RAM chips, most areas of consumer electronics, computer printers, photo-copiers and typewriters.
Another problem affecting the industry is the issue of reciprocal access to overseas markets. Since the 1981 and 1984 Telecommunications Acts, our market has largely been opened to imports of foreign telecommunications equipment. Most of us agree that free trade is an excellent policy—but only if everyone follows it. Our policy has been a high risk one of opening our market, while no country, apart from the United States, has opened its market in return.
I could cite many examples, but I shall refer only to the key telephone systems sector. The overseas suppliers comprise two Ericsson systems from Sweden, NEC from Japan, AIOP from France, Panasonic from Japan, the Blick Alcatel system from France, Siemens from West Germany, DTWE from West Germany, TIE from the United States, Nitsuko from Japan and MITEL from a United States plant. The only British manufacturers in that market are Philips, GEC and Plessey, which assembles the Nitsuko system. All the cellular radio equipment on the market comes from Sweden and the United States. British Telecom recently agreed to buy Ericsson digital exchanges and Mercury is buying Northern Telecom exchanges from Canada.
The result is that in the year to February 1985, we imported £36·2 million worth of telecom equipment from Japan and £22·9 million worth from Sweden. In return, we sent just £400,000 worth to Japan and £4·1 million to Sweden—hardly "free trade" in the true sense of the term.
The answer to the problem is not nationalisation or the ludicrous dirigiste policies proposed by the Opposition. Those policies have been discredited and have failed in France. In 1982, the Socialist-Communist Government in France produced the grand plan filière électronrique aimed at creating 200,000 new jobs and a £2·75 billion trade surplus for the French IT industry. Instead, the nationalised electronics companies in France have notched up vast losses, the French deficit in IT products has increased by leaps and bounds and employment has decreased.
Grandiose schemes dreamt up by politicians and bureaucrats are not the answer. We need only look at our example of Nexos, which was dreamt up by the last Labour Government as a United Kingdom rival to IBM. In its three years of operation, it succeeded only in importing Japanese facsimile machines at way above cost through a middle man. When it went bust in 1982, £2 million worth of its facsimile machines were sold back to the same middle man for just £1. Through National Enterprise Board policies of giving cost-plus contracts to other NEB companies, Nexos ended up losing a total of £36 million of taxpayers' money — so much for grandiose schemes dreamt up by politicians and bureaucrats totally out of touch with reality, but with a hand deep in the taxpayers' pocket.
I often feel that politicians are arrogant in thinking that they succeed in creating jobs by waving a magic wand when experienced business men cannot. I especially feel that many Opposition Members are arrogant when they have no business experience, having been full-time politicians, academics or journalists.
At the end of the day, the best way of helping high-tech industries — [Interruption.] Mr. Deputy Speaker, I believe that an Opposition Member wishes to intervene.

Mr. Deputy Speaker: The debate will not continue for much longer. The hon. Member should draw his remarks to a close.

Mr. Oppenheim: Yes, Mr. Deputy Speaker. At the end of the day, the best way of helping high technology is by creating a strong and flourishing economy through lowering inflation, through incentives and by encouraging venture capital. We have some way to go—

Mr. Deputy Speaker: Order. I am sorry, but the hon. Member's time has expired.

Mr. Barry Sheerman: I hope that I shall not keep the House long, but I wish to concentrate on education and training for the new technologies. I have heard many Conservative Members talk about improvements and the light at the end of the tunnel. I find that difficult to believe, as a Member from the west Yorkshire area and having heard only yesterday the chilling news that another large, modern factory would close in the Brighouse area. That is not in my constituency, but I have a constituency interest in it because many of my constituents work in that factory. I heard that 550 jobs have been lost at the factory of Philips, an important manufacturer of washing machines and tumble dryers. I understand that that factory will be closed because it would have been more difficult for the company to close its Italian factory. What will the Secretary of State do about that? Will he intervene to save those 550 jobs? Will he ensure that the Government make an effort, not with grandiose schemes but by encouraging Philips to stay in this country and produce appliances using high technology?
The motion refers to investment, research and development and education and training. Sadly, on all three counts, this country is in a parlous position. The more I look at the research and development failure of our industry, the more I see that this is paralleled by our failure to train and educate people in high technology.
If we are to have a proper training policy for high technology or, for that matter, any kind of technology, it is about time the Government took a lead, recognised their mistakes and returned to a system of industrial training boards — perhaps a modified system — and either a training tax or a training levy to ensure that training is provided. The Government should step in and provide training for the future if industry cannot afford to do so.
During this debate we have talked a little more sensibly than we did during the days of one of the predecessors of the present Secretary of State when we were sharply divided between the need for sunrise and sunset industries. Most of us have known that all industries are a mixture of both. The older, more established industries—such as the textiles and engineering industries in west Yorkshire —depend for their future and their order books, both at home and abroad, on investment in the latest technology. Some companies have done that, but some companies need help and incentives from the Government. Often,

firms that are not in the industrial development regions lose out to foreign competitors and competitors in the industrial development regions.
I wish to concentrate on the infrastructure of training, which seems to be disappearing. The infrastructure of education and training for our engineering and textile industries is reaching such a low point that one cannot find departments in the polytechnics or technical colleges that sufficiently support local industry.
The report of the House of Lords Select Committee on Science and Technology, which was published only at the end of last year, points out the real deficiencies in education and training for the new technologies. The first paragraph of the summary of conclusions and recommendations says that
Technological progress in the UK is being hampered by failure to develop its human resources. The UK's competitive edge in international trade is at stake. There is no more serious challenge than the adequate provision of people properly qualified and trained to exploit new technologies as they emerge.
As the report so starkly points out, the situation that we face today is one in which our polytechnics and universities have been run down and, even more important, the morale of the people responsible for education and training in our polytechnics and universities has been reduced to an all-time low. If the Government are to do anything about the problem, they must first put money into the polytechnics and universities, so that there can be an expansion programme instead of a decline. The people who man the polytechnics and universities must be told that the Government believe in them, and that they want to give them a future and to pay them a proper rate for the job.

Mr. Tony Baldry: I commend to the hon. Member for Huddersfield (Mr. Sheerman) for bedtime reading the report by the Institute of Manpower Studies on conflicts and competition, in which he would find that the British Government spend proportionately as much on training as our competitors, West Germany, Japan and the United States. The difficulty is that we need to get British industry to spend more money on training.
To ensure a truly caring society it is necessary for us as a community to create sufficient wealth. Indeed, it was the shadow Secretary of State for Trade and Industry who, very pertinently, once said:
We must persuade people that job creation is the key to creating jobs in the caring industries like the hospitals. Socialists must interest themselves more in the creation of wealth and not just in the redistribution of wealth.
To create wealth we need to have a competitive trade policy, and there are three points on an agenda for action to which the Government need to address themselves. First, they must try to achieve some stability in the exchange rates. At one moment the pound is riding high; at the next it seems to be heading for a fall. Uncertainty and confusion are a nightmare for exporters. One of the most destructive aspects of high inflation rates is that it is very difficult for industrialists and business men to predict the future. A similar situation arises when there are wildly fluctuating exchange rates. Therefore, there is a desperate need for stability in exchange rates.
I urge the Government to give serious consideration to the need for us to work much more closely together in the European Community. That means the United Kingdom


joining the European monetary system so that Europe as a community can begin to acquire a more powerful and coordinated voice in the world economy once more.
The second point on an agenda for action is related to the first one. There is a need to keep on bludgeoning Japan into the realisation that Japan, more than any other country, is dependent on there being free trade in the world. It is nonsense if a sweet manufacturer cannot export sweets to Japan without the Japanese complaining about the colour of the sweets, or if it takes eight days to import goods into Japan—one to clear customs and the other seven to clear document control.
It is not only Japan that is involved. If countries such as the United States start to take retaliatory action against Japan, there will be a danger of Japanese automotive, mechanical and telecommunications goods being dumped in Britain. The world international community as a whole must keep on making it clear to the Japanese that their behaviour and their actions are wholly and completely unacceptable, and that in addition they actually endanger Japan's long-term prosperity as much as that of the rest of the free world.
The third point on the agenda for action was eloquently articulated by my hon. Friend the Member for Lewisham, West (Mr. Maples). In looking around the world, we can see many places in which there is free trade. Increasingly, Governments are involving themselves in their industry on a selective basis. I choose one random example from a recent report by Hawker Siddeley, which concluded that British exporters are being gazumped by foreign Governments in the international bidding for big contracts with developing countries. The report concluded that the generosity and flexibility of France, West Germany and Japan, our competitors, in offering soft loans and tied aid in support of their own exporters' tenders helped them to win world contracts.
I am not suggesting for a moment that we should allow ourselves to be sucked into a subsidy quagmire, but there is a clear need—particularly against the background of our recently losing the Bosphorus bridge contract—to consider how Governments can more selectively assess British manufacturers to win the increasingly few high prestige contracts. This is not subsidy but selective partnership between Government and industry. If we can achieve that sort of agenda for action—we can do it if we do not lose our nerve, and if we do not panic and endanger what has already been achieved—we can start to win back for Britain an increasing share of world trade.
In the past few weeks much has been made of the views of the CBI and its attitudes towards Government policy and the broad strategy that the Conservative party is following. I draw to the attention of the House—I do not think that it has had a wide enough press — a statement by Sir Terence Beckett when he spoke to a Committee of the House in the week before last. He said:
There is profound confusion, in the national debate, between the level of unemployment, attended by the feeling this encourages that our present policies are failing, and the progress that we are actually making with those policies in improving the effectiveness of the economy. Those policies"—
by that he meant our Government's policies—
represent the best hope we have for the future prosperity of the country, and for dealing with unemployment in the best possible way.
I believe that, providing we can with vigour turn our minds to how we can ensure a competitive trade policy not only here but throughout the rest of the world, and how

we can help British industry by stabilising the exchange rate, there is no reason why the boom that we are now witnessing, with our GDP growing this year by 4 per cent., cannot be a continuing boom which will bring back the wealth that we as a society need if we are to be a truly caring society.

Dr. Jeremy Bray: The Secretary of State is not, I suspect, someone who wastes a great deal of time reading his speeches in Hansard. But he might at least ensure that those who draft Government amendments read his press releases. The Government congratulate themselves on the recent substantial increase in manufacturing output, but it is only just over half way back to the level that they inherited in 1979. They congratulate themselves on the sharp rise in exports — which, unfortunately, has been exceeded by an even sharper rise in imports. They congratulate themselves on major gains in competitiveness, which has been caused by a fall in the pound that panicked the Chancellor into raising interest rates to exorbitant levels. As to the optimism of the CBI about business, it has not yet recovered to its level of a year ago, before the miners' strike. That is not a pleasant picture of our industrial scene.
The Minister catalogued the measures taken to stimulate research and development in British industry, but admitted that the net effect has resulted in a small fall in real terms—of £2 million from £1,566 million—in intramural research and development in industry between 1978 and 1983. He said that he thought matters would be better in 1984, but he will never know because his Department has run down the statistical service and in 1984 will not collect any returns from industry about research and development.
The right hon. Member for Waveney (Mr. Prior) rightly stressed the role of manufacturing industry as essential to our economic recovery. As chairman of a great company, he naturally observes the closing stages of negotiations of major bids. He should talk to his technical director. Even if GEC does not need the money to compete with other British firms in research and development, it has always been forward in claiming whatever money is available—quite naturally—and also in complaining that if there is not a lot of money to support research and development it is at a disadvantage compared with its overseas competitors. I hope that the right hon. Gentleman will discuss that with his very competent technical director.
The hon. Member for Havant (Mr. Lloyd) stressed the need for a properly designed industrial strategy, but he did not offer us any niches in which we could survive the rigours of this Government's policies. My hon. Friend the Member for Wrexham (Dr. Marek) described how his local authority, against all the odds, attracted to his constituency — as much in need of jobs as all our constituencies—the Japanese calculator firm Sharp.
The hon. Member for Eastleigh (Sir D. Price) has seen a loss of jobs in his constituency, although he did not mention that. However, my hon. Friend the Member for Glasgow, Springburn (Mr. Martin) dwelt on that at some length. It concerns the effect of the running down and closure of railway workshops. There is a loss of 1,200 jobs, which can be ill afforded, in Springburn and 400 jobs in Eastleigh.
With the decline of the old, there is an absence of the development of the new. My hon. Friends were right to


say that when the Government can see years ahead the effects of technical change, they should provide support for alternative development.
My hon. Friend the Member for Kingston upon Hull, West (Mr. Randall) stressed the need for the right sort of support for the electronics industry, which, unfortunately, it is not getting.
The hon. Member for Yeovil (Mr. Ashdown) spoke with knowledge and insight of the need to protect British firms against interference from American suppliers under American law, which is a monstrous intrusion not only on our freedom of trade but on our legal independence.
My hon. Friend the Member for Burnley (Mr. Pike) spoke eloquently of the co-operation between management and workers needed in handling technical change—a co-operation that the Government have sought to whittle away by their attack upon the trade unions. He argued that new technological developments offered new industries that could bring relief to areas of high unemployment, such as his constituency.
My hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman) has a unique combination of the old and the new in his constituency. In the care that he exercises over both, we see the kind of work being done by hon. Members on both sides of the House to cushion their constituents against the appalling rigours to which the Government's policies have subjected them.
My hon. Friend the Member for Huddersfield (Mr. Sheerman) spoke of the closure of the Philips washing machine plant in his constituency, which was announced today. He made an eloquent plea for the training that is absolutely essential to industrial recovery.
The hon. Member for Banbury (Mr. Baldry) called for stability of the exchange rate, which I fear he will not find while the Government cling to their medium-term financial strategy, which specifically excludes stabilisation of the exchange rate.
We are concerned with the products that people want to buy in the shops and the showrooms, with the processes by which they are produced and, above all, with the people we need to produce them. The Government's record is catastrophic.
It is symbolic that nationally we are compulsive video viewers. We have been reduced to that — perhaps because the Government have left us so little to do—but we have not the wit to make video players for ourselves.
In 1979, we had a surplus of £2·7 billion in the balance of trade in manufactured goods. In 1985, that had turned into a deficit of £3·8 billion. The shift, some £6·5 billion, represents 13 per cent. of our imports in 1984. The decline in trade performance, measured by exports as a percentage of imports, has spread across the board.
I commend the Secretary of State to read another of his own releases, the publication "United Kingdom trade with European countries", which states:
Crude balances can give a misleading indication of relative trading performance over time so we also give the ratio of exports to imports.
In motor vehicles, electrical and electronic and data processing equipment, exports, already only 91 per cent. of imports in 1979, had fallen to 71 per cent. of imports by 1984. Even in the strongest class of goods, chemicals, exports fell from 132 per cent. of imports in 1979 to 126 per cent. in 1984.
What is alarming is that there is a tendency for the fastest growing industries to suffer the greatest decline in their trade position. Two industries in which I have a constituency interest, steel and mining machinery, illustrate the point. In steel, despite all its difficulties, the ratio of exports to imports has increased from 106 per cent. in 1979 to 138 per cent. in 1984. Mining machinery has the unique distinction of maintaining the ratio of exports to imports at just over 700 per cent. with scarcely any imports able to compete against the thoroughly efficient firms of Anderson, Strathclyde in my constituency and Dowty. Pharmaceuticals, a growth industry, fell from 242 per cent. to 204 per cent. in the ratio of exports to imports, and active electronic components, which includes micro circuits, fell from 106 per cent. to 70 per cent.
If one reads through some of the industries in which the improvement in the ratio has been more than 10 per cent. and contrasts those with the industries in which the deterioration has been more than 10 per cent., one observes the pattern. The improvement has come in the extraction of minerals, the steel industry, leather and leather goods, food, drink and tobacco and non-ferrous metals—not exactly the most buoyant growth industries of today. The deterioration in the trade balance has come in electronic data, man-made fibres, pharmaceutical products, timber and wooden furniture, industrial electrical equipment, non-metallic minerals, instrument engineering, rubber and plastics, motor vehicles and parts, food, chemical machinery and active electronic components. It is a devastating picture.
With the increase in exports and imports of manufactures up to 1979, British industry is now highly integrated with that of other industrial countries particularly in the European Community. The flows of exports and imports are now about equal to the value added in manufacturing industry and to home consumption of manufactured goods. In other words, trade is not peripheral. Trade is as large as home production and as large as home consumption. The export market is as important as the home market. As a source of supply of goods, imports are as important as home production, so shifts in trade have a major impact on home production. The same integration that exists over the economy as a whole is also to be found in individual firms, with few major establishments today able to survive without their overseas suppliers and customers.
The 13 per cent. widening in the manufactures trade gap has been reflected in a 14 per cent. fall in manufacturing output between 1979 and 1981 with manufacturing output now still 6·8 per cent. below the 1979 peak.
If the oil wealth were used to modernise and re-equip British industry, it would be reasonable to expect a surge of investment and a flood of imported machinery, but investment in manufacturing dropped by a disastrous 35 per cent. between 1979 and 1982, and in 1984 it was still 25 per cent. below the 1979 level.
Not only has investment fallen below the replacement level needed to maintain capacity, but a fall of 14 per cent. in manufacturing output between 1979 and 1981 has knocked out swathes of existing manufacturing capacity in all our constituencies. Nothing like that has happened before in Britain since the war; nor has it happened in the past 10 years in any other industrial country.
We must consider price and technical competitiveness together. We cannot create an overall competitive industry


by a shift in the exchange rate, but we can quickly destroy it. The Government destroyed overall competitiveness and industry itself in a massive way between 1979 and 1981. Industry will take many years to recover from that destruction.
To the Chancellor none of this matters. To him manufacturing industry is a bore. He sees Britain's future as a jumbo-sized tax haven—another Channel island. When the second oil price increase knocked out the Channel islands' tomato-growing industry, the young people flocked to the tax-dodging Channel island banks which were growing explosively. The Chancellor seems to think that that can happen in Britain—in Barnsley, Greenock and Port Glasgow — with the growth in services making good the decline in manufacturing.
The Chancellor does not care about jobs. But look at the balance of payments. As one right hon. Member argued recently,
manufacturing industry provides about 25 per cent. of our GDP and 25 per cent. of our jobs. It also provides 75 per cent. of our visible trade exports. If we were to replace the contribution by manufacturing industry to the balance of payments we would need to increase our exports of services by between £60 billion and £70 billion a year. To do that we should have to increase our share of world exports of services dramatically from under 10 per cent. today to over 50 per cent. That is really a wholly impossible task at the moment. So without manufacturing industry Britain would not survive.
That was not one of my right hon. Friends; that was the right hon. Member for Mole Valley (Mr. Baker), the Minister for Local Government, from his previous perch as Minister for Information Technology, in evidence to the Lords Select Committee on Science and Technology. Britain cannot hope to increase its share of world trade in services fast enough to earn the foreign exchange needed to bring Britain's millions back into employment.
The Thatcherite solution is to cut Britain's overheads, by cutting social security and the real wages of workers. By these means they hope to price Britain back into work as a low-wage, low tech, low growth, low skilled economy.

Mr. Randall: The Hong Kong of the west.

Dr. Bray: That is not the nature of Hong Kong—which is the place where I was born—and it would never tolerate this Government's policies.
Thatcherite Britain is condemned to a tightening vortex of high interest rates, high interest costs, low investment, low technology, low skills, low growth, high cost, deteriorating trade, a falling pound and still higher interest rates—all with the pretext of reducing inflation which obstinately bounces along among the upper rates of inflation in industrial countries. Meanwhile, such strength as this country has left in higher education, scientific research and democratic government is being recklessly whittled away.
The industrial decline of Britain has been lamented lovingly ever since the Paris exhibition of 1867, when a Britain then producing one third of the world's manufactures was prominent in scarcely a dozen out of 90 classes of manufactures exhibited. Under this Government, that long, agonising, drawn-out decline has become a near terminal collapse. What we need now is emergency resuscitation followed by policies to reverse the long-term decline.
The three engines of growth on the supply side of a serious industrial policy are education and training,

investment and research and development. The Government have neglected all three. In the earlier stages of recovery, there has to be a major increase in research and development effort on specific products and processes in manufacturing industry. That is needed to ensure that our products are in demand and up to date, that our training is in relevant skills and that investment is in competitive plants and processes, not in the obsolete plant of yesteryear.
Research and development expenditure in manufacturing industry is about £4 billion a year. There has been no increase since 1978. In no industry has it kept Britain's trade performance in balance with the competition. It is unevenly distributed. Research and development expenditure in the three research-intensive industries — chemicals, the electrical and electronics industry, and aerospace — is about £2,500 per worker per annum. Much of the research and development in electronics and aerospace is for defence purposes, paid for by the Government and lacking civil application. Research and development expenditure in the rest of the manufacturing industry, with 80 per cent. of total manufacturing employment, is, compared with the £2,500 per worker in the research-intensive sector, £250 per worker. Thus there are two sectors—the research-intensive sector and the low research sector.
In aerospace, with a strong element of defence support, research and development expenditure is £4,700 per employee, and much of it is on development. In imperial Chemical Industries, with the longest and strongest tradition of civil research and development, expenditure is £3,400 per worker per year. Motor vehicles have come up well. They are in an intermediate position, pulling up with £840 per worker. The British Steel Corporation, after the MacGregor cuts, is now down to £220 per employee. BSC is rapidly becoming a technological vassal of Japan. Textiles and paper, printing and publishing—mostly our beloved newspapers—are spending as little as £40 per worker per year. In footwear and clothing, expenditure is £17 per employee.

Mr. Baldry: Would not greater progress be made in the newspapers if the unions were more co-operative about introducing new technology? Perhaps the hon. Gentleman can have a word with Sogat.

Dr. Bray: There is some justice in what toe hon. Gentleman says. However, it is a chicken and egg argument. Had there been proper consultation with workers when the technological revolution in printing began, there would be a different picture today.
With the imbalance that we have in research intensity between the two sectors of the economy, if any increase in research and development expenditure were con-centrated on the research-intensive sector, the great mass of manufacturing industry would rapidly become less competitive. If, on the other hand, the research-intensive sector were denied further support, it would continue to fall victim to foreign competition, and we would lose possibly the most effective research and development in terms of potential gross domestic product per pound of additional research and development expenditure. An optimum distribution of support would lie somewhere in between.
The only principles guiding the Government's policies are that the market will provide, and that, where it does


not, expenditure must be cut. The trouble is that there is no inherent competitive incentive in a market economy to public or private commercial organisations to undertake pre-competitive research, and the Government are starving such research of resources. Basic science and pre-competitive applied research, including research in enabling technologies and in public concerns such as health, safety and the environment, must be financed by the Government.
Sometimes pre-competitive research may be essential to the survival of an industry, but, because the benefits of the research cannot be used to strengthen one firm against its competitors, firms may not undertake that research on their own. That may be one factor lying behind the collapse of shipbuilding in this country.
Competitive research and development aimed at specific products and processes may also be neglected by firms if they have suffered from low profits and have had to concentrate simply on maintaining cash flow, if they have no confidence that profitable times will continue for long enough to enable them to reap the benefits of research, or if they always have to pitch their profit and loss accounts at maintaining a higher share price in order to frighten off the big bad takeover wolf.
All those conditions have applied in recent years and they have reached a new intensity under the present Government. United Kingdom research and development, and its fruits in manufacturing competitiveness as reflected in trade statistics, are now rapidly falling behind other industrial countries. We need to pull up rapidly and to pull ahead in research and development to make good the oil revenues that will now decline. The position is moving so fast that international comparisons at a point in time are no longer an appropriate guide to action.
Faced with the need for research and development, the inadequacies of the Government's actions make one weep. In the past, Britain has been pre-eminent in basic science, which is the necessary foundation for a healthy, advanced industrial economy, as Japan is discovering. Today, at a time of seminal growth in many branches of science, the Government's advisory board on the research councils has told the Government that their present plans will lead to a decline of 25 per cent. in the basic science budget over the next 10 years.
Already, whether measured by Nobel prizes, citations in the science journals, registration of patents or just common observation at any international scientific conference, Britain is falling behind in basic science. In the initial surge of research and development needed in manufacturing industry, the emphasis must be on fairly short-term developments and on updating products and processes. The aim should be for industry effectively to review and, where necessary, to develop and design anew all the products and processes of United Kingdom manufacturing industry.
We should not be too highfalutin about what constitutes development. The OECD Frascati definitions strike the right note in distinguishing research and development from investment and other activities by the element of novelty or innovation. What may be development in one industry may be standard practice in another. Thus, the use of computer-aided design and manfucturing systems may be standard practice in aerospace, but its introduction would be development in most general engineering.
An early step must be technological reconnaissance internationally. The purchasing and testing of competitors' products and their licensing, improvement and redesign must be seen as development and supported as such. But what do the Government do? They cut the staff of the Department of Trade and Industry engaged on such work, and make no provision for its takeover by industry. Today, a medium-sized industrial economy cannot hope to develop all its own technology. Most of it will come from abroad, embodied in plant or transferred by licensing. Likewise, modern industry cannot keep up, and will not understand, unless it has sufficient of its own technology that is fully competitive in world markets. That is why Government support for research and development in manufacturing industry is essential.
The point is often made that research and development and technological advance generally are restricted by inadequate supplies of qualified technologists and scientists. That is true. But it need not prevent an initial surge in R and D to prime the pump for more effective deployment and training of qualified manpower. Today 80,000 scientists and engineers are engaged in research and development in manufacturing industry. There are 500,000 economically active scientists and engineers with the equivalent of first degree or higher qualifications working elsewhere.
In 1982, just before the Government cuts in higher education which have not been made good by the recent restoration in engineering, 35,000 technologists, engineers and scientists obtained first degrees. Therefore, there is room for a substantial, early and major increase in research and development at the sharper end of the development of manufacturing industry. But research and development alone will not restore competitiveness. There must be investment and training as well, with proper planning within the enterprise.
My right hon. and hon. Friends rightly stress the need for national planning. The need for planning within the enterprise is equally important. Indeed, the right hon. Member for Waveney will have great fun listening to the views of the lower levels of management in GEC in relation to planning, and constrasting those with the views of his managing director. A marked change is today taking place in industry, because many of our young scientists and engineers who have graduated in the lifetime of this Government have seen no future in technology and have gone into training as accountants. Therefore, a thoroughly modern point of view is available about the methods and systems that we waffle on about in this House when applied to other people, but are so reluctant to apply to our own affairs, as are the senior managers with whom we talk who are responsible for the conduct of business as a whole.
My right hon. and hon. Friends have put forward practical proposals to make the long-term funds available for investment and to create the levels of education and training that are needed. Where are the Government's plans? They have none to measure up to the task which faces the nation.
Where will the money and jobs come from? We are talking about research and development, investment and training — the basic wealth-creating resources of the country. We are talking about a payback from fairly short-term development and technology transfer which is certainly available within five years. Research and longer


term development will need longer horizons, but only one tenth of the expenditure. Therefore, there should be no difficulty nationally in funding research and development.
For investment in manufacturing industry, the proposals of my right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley) for the repatriation of overseas portfolio investment will encourage manufacturing industry to make good use of the funds which will become available—and money is much better spent on training than on having to pay unemployment benefit.
Finally and most important, what of the jobs? If we succeed in our objectives of restoring and maintaining the technical and price competitiveness of manufacturing industry, there is no reason why, over the first five years, employment in manufacturing industry should not increase. There is no limit if we are fully competitive in world markets. We can increase our share of home and export markets.
However, there is a long-term shift away from employment in manufacturing, just as there has been in agriculture for many years. Provided we maintain that competitiveness, so that there is no balance of payments constraint on the expansion of public and private services and construction, there are ample demands and needs there to absorb the one in six of our people who are denied jobs as a result of the Government's policies. True, we cannot eat our cake before we have baked it. The first priority must be to get manufacturing back on its feet, once again creating the wealth that this Government have squandered with such profligacy.

The Secretary of State for Trade and Industry (Mr. Norman Tebbit): I owe the House an explanation for my absence at the beginning of the debate. Some months ago I committed myself to opening a British Overseas Trade Board conference on exports and jobs, so I faced the choice between talking to 200 industrialists, engaged in the business of exports, or listening to the right hon. and learned Member for Monklands, East (Mr. Smith). Out of courtesy I must at least pretend that it was a struggle, but I doubt whether anyone in the House would believe me. I am told that the right hon. and learned gentleman said that he wanted to start a great national debate. [Interruption.] I took the trouble to get reports of what the right hon. and learned Gentleman said.

Mr. John Smith: Can the right hon. Gentleman believe them?

Mr. Tebbit: I will come back to the right hon. and learned Gentleman before long. He had better save his breath.

Mr. Smith: When the right hon. Gentleman speaks again I will go to a seminar.

Mr. Tebbit: Every time I speak it is a seminar for the right hon. and learned Gentleman. He said that he wanted to start a great debate about industry. I must tell him that industry stopped the debate a long time ago and got on with the business of growing, and he has not even noticed. Of course, I am sorry about the clash between the two events today. Certainly I would not accuse the Opposition of knowingly seeking to detract from the BOTB event.

Mr. Smith: I did not even know that it was on.

Mr. Tebbit: Indeed, that answers it. The right hon. and learned Gentleman is not guilty on the main charge, but we find him guilty on the lesser charge of ignorance and fecklessness. He is ignorant of what the Government are doing to assist industry and exports and to create sobs. For that he and his colleagues have a list of convictions as long as one's arm, and they are not alone in that.
The other day I was reading The Guardian, what I call the flabby end of the Fleet street heavies. A Mr. Keegan —I understand he is a financial journalist—was writing in The Guardian on Monday. He accused the Government
of raising billions and billions from selling public sector assets without pumping a penny piece back into resuscitating the declining industrial and hitech heart of Britain.
That is broadly the charge levelled against the Government in today's debate. That is not surprising. It was the charge that was made by the TUC in its document, "The Future Business". It was rehashed by Mr. Keegan and regurgitated by the right hon. and learned Member for Monklands, East, sticking to his brief as always like the lawyer he is. Mr. Keegan referred to us raising billions and billions from privatisation. Yes, we have, £5·5 billion to date.

Mr. Smith: I did not say that.

Mr. Tebbit: I know that the right hon. and learned Gentleman did not say that bit. He did not get time to rehash all of it. The Guardian referred to the Government raising billions
without pumping a penny piece back into resuscitating the declining industrial and hightech heart of Britain.
Over the six years 1979–80 to 1984–85 my Department's aggregate expenditure on regional industrial assistance has been nearly £3·3 billion, on science and technology nearly £1·6 billion, on export promotion £180 million, and on other industrial support some £3 billion, including £1.4 billion for BL and £0·5 billion for Rolls-Royce. The nationalised industries' external financing limits over those years amount to another £14 billion. That is well clear of £20 billion all told. Not a penny piece, says The Guardian. It cannot tell the difference between a penny piece and £14 billion. Last year alone the cost of assistance to private industry was about the same as the £5·5 billion that has resulted from privatisation since 1979. It is only crass ignorance or wilful partisan bias that can cause the production of such rubbish. I believe that the hon. Member for Motherwell, South (Dr. Bray) has from time to time expressed an interest in recycling rubbish — he has certainly been at it today.
At the lower end of Fleet street we have the Star. On Monday 13 May, in an article about exports to China, it made a great deal of our lack of success in selling aircraft to that country. It spoke of a mere £25 million that has been paid for eight mini-airliners from Short Bros. of Belfast. That, it said, is all that we have achieved. Ignorance or political spite caused the Star to forget our 20 per cent. share of a $150 million order for airbuses and the $150 million order for 10 HS146s. It is that degree of distortion and ignorance that we have to combat. That being so, I turn again to the right hon. and learned Member for Monksland, East.
In the right hon. and learned Gentleman's restatement of TUC policy, presumably because the TUC thought that it had not had much coverage and asked the Opposition to give it a whirl again, the right hon. and learned Gentleman attempted to start, as he called it, the great debate. By 6


o'clock this evening there was one Labour Back Bencher and one Labour Front Bencher in the Chamber. Even the right hon. and learned Gentleman was not present for the great debate.

Mr. Sheerman: There were only two Tories present.

Mr. Tebbit: No. There has been a good Conservative attendance throughout the debate. I accept that the Labour Whips had better things to do than to sit in the Chamber. Indeed, they were outside trying to get Labour Back Benchers to participate in the debate. They got them in one at a time. The right hon. and learned Gentleman gave the TUC document another whirl. He neither added to nor subtracted from the TUC's position.

Mr. John Smith: What document?

Mr. Tebbit: The right hon. and learned Gentleman's ignorance is even deeper than I thought. He does not know that the TUC has published the document to which I have referred.

Mr. Smith: I hesitate to engage the right hon. Gentleman at the level to which he has reduced the debate. It is a serious debate and he has great responsibility to the country and to the House. As the right hon. Gentleman did not hear my speech, let me make it plain now that from start to finish I made no reference to any TUC document. I ask him to listen to my speech next time instead of listening to unreliable reporters.

Mr. Tebbit: I have already told the right hon. and learned Gentleman of the terrible clash with which I was faced. I had to decide whether to listen to him or to help 200 British exporters to get more jobs. Incidentally, I have a photocopy of the TUC document. If the right hon. and learned Gentleman has not seen it, I shall pass it to him at the end of the debate. It is entitled "The Future Business". It seems that the right hon. and learned Gentleman has not even read it. He will get into terrible trouble when the TUC hears about that. However, I have met very few people who have read it.
I enjoyed immensely the speech of the right hon. Member for Chesterfield (Mr. Benn). I suppose that it would not be within the rules of order to make it again so that those who were not present when it was delivered could hear it. What a pity that is. I am not sure whether the right hon. and learned Gentleman enjoyed it too much. After all, the right hon. Gentleman, however much we may pull his leg, represents a substantial slice of opinion in the Labour party. It is probably a minority opinion. It is certainly a minority opinion in this House, but whether it is a minority opinion among paid-up individual members of the Labour party —a pretty select band—is another matter.
When I heard the right hon. Member for Chesterfield compare Liverpool with Beirut, I wondered at his capacity for distorting reality into Left-wing fantasy, although I enjoyed his lumping into one revisionist bundle Sir Winston Churchill, Earls Attlee, Eden and Stockton, Lord Wilson, my right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath), Sir Stafford Cripps, Ernie Bevin, the right hon. Member for Leeds, East (Mr. Healey) and a cast of thousands. He continued with a splendid attack, which I enjoyed, on aristocrats, of which he is one, and on the last Labour Government, of which he was a

member. The right hon. Gentleman ended with the astounding statement, "Industry has gone." And then, so was he. What a vision of the barmy Left, which is the visible manifestation of the nasty Left that is dominating the Labour party.
In a different way entirely I enjoyed the speech of my right hon. Friend the Member for Waveney (Mr. Prior). It was a very constructive and reasoned speech, even if I could not agree immediately with everything that he said.
The hon. Member for Stockton, South (Mr. Wrigglesworth), unlike the right hon. Member for Chesterfield's hysterical and paranoic view of impending disaster, had a sort of pale beige middle of the road, boring view of impending disaster, but I should like to cheer him up a little. He is really a very nice chap, I am told. He should not be so miserable, except when he considers the opinion polls and their implications for the alliance. I can cheer him up about Alvey. The hon. Member was looking only at the payments which have been made, which lag well behind the projects which have been approved. During the last two years about 100 projects have been approved and about three quarters of the total funds which have been allowed for Alvey have now been allocated. Similarly, his genteel gloom about the use of microelectronics in manufacturing industries was not well justified. We are just behind the Germans, but we are well ahead of France, and in European terms we are performing well.
My hon. Friend the Member for Havant (Mr. Lloyd) made a splendid speech. He neglected only one major aspect of his proposed strategy which damages all of us very much—the lack of a European common market. One day I hope that we shall create it.
The hon. Member for Wrexham (Dr. Marek) was somewhat misleading. I spoke this afternoon to my right hon. Friend the Secretary of State for Wales. He told me that the decision by the Sharp company of Japan to increase its operations in Wrexham was taken well before the visit by the borough council, although I am sure that that visit was not harmful to the project. I believe that there are excellent relationships between the company and the council.

Dr. Marek: There is one way to decide this matter: to ask Sharp. I hope that the Secretary of State will also ask the leader and the chief executive of Wrexham borough council. I think he will find that what I said was correct.

Mr. Tebbit: If there is any doubt about the matter, I am sure that my right hon. Friend the Secretary of State for Wales will let me know.
The hon. Member for Wrexham was also rather gloomy and dismissive about the number of new jobs which have been created during the last two years. During that period 613,000 extra jobs have been created. Many of them are, admittedly, part-time jobs, but at least 118,000 are full-time jobs. When the hon. Gentleman is making comparisons with other countries he ought to bear in mind that 65 per cent. of the population of the United Kingdom between the ages of 15 and 64 is in work, compared with 59 per cent. in Germany, 61 per cent. in France and 66 per cent, in the United States.
I enjoyed the speeches of my hon. Friends the Members for Eastleigh (Sir D. Price) and for Erith and Crayford (Mr. Evennett) and the report of what my hon. Friend the


Member for Birmingham, Northfield (Mr. King) said and his encouraging view of the great efforts being made at British Leyland.
I must tell the hon. Member for Burnley (Mr. Pike) that it is not true that Lucas has been badly treated by the Government. I cannot, of course, comment on financial support for individual companies, but for the aircraft and aerospace industry, which is vital to Lucas, the support in the past five years has been £1·28 billion.
My hon. Friend the Member for Bexhill and Battle (Mr. Wardle) made some interesting points about the relations between big and small firms. One of the purposes of the BOTB conference which I attended this afternoon was to encourage large firms to assist smaller firms in their export efforts by carrying them, so to speak, piggyback into markets where they would not previously have been. I hope that that practice will grow.
Of course I agree with my hon. Friend the Member for Lewisham, West (Mr. Maples) that we want manufacturing industry, but services will provide more and more of our jobs as they do in the United States. I agree about the need for support for exporters. It is hard work removing trade barriers, especially in the European Community. As to Japan and the Japanese banks, I hope that he will forgive me if I do not deal with how we might react to the problem of reciprocity.
The hon. Member for Greenock and Port Glasgow (Dr. Godman) was understanding of the role of the electronics industry in his constituency and his part of Scotland. I share his hopes for Scott Lithgow.
My hon. Friend the Member for Amber Valley (Mr. Oppenheim) was thoughtful and understanding. I think carefully about those whom we wish to encourage to be inward investors.
I share the desire of my hon. Friend the Member for Banbury (Mr. Baldry) for a stable exchange rate. My worry is whether we can fix the price of the dollar. That is the question that must be asked when we ask whether we can fix the price of sterling. That is a formidable undertaking. I doubt whether the Americans can fix the price of the dollar, let alone us. I share his desire to put more pressure on Japan.
The hon. Member for Motherwell, South seems to be in a bad way today. He seems to be gloomy, upset and nostalgic for those good old Labour Government days when they had a massive trade deficit. He does not talk about those days.

Mr. John Smith: Has the right hon. Gentleman heard about North sea oil?

Mr. Tebbit: Yes. I might equally ask the right hon. and learned Gentleman whether he has ever heard of manufacturing, banking or financial services, or any other aspect of our trade. The Labour Government suffered from chronic balance of payments problems, and for the past five years we have had a balance or better on our trade. [HON. MEMBERS: "It is oil".] So, it is oil. Goodness me, if it were coal Opposition Members would not be shouting in derision "It is coal", would they? What is the difference between coal and oil except that oil is more difficult to get out from the North sea and it is got out profitably by private enterprise whereas coal is easier to extract and we lose money on getting it out with a nationalised industry?

Mr. Smith: The right hon. Gentleman mentioned oil. The Tory Government did nothing to obtain North sea oil.
They inherited a self-sufficiency of production in North sea oil when they took office in 1979. The Tory Government received a windfall. They have had more money than any Government have ever had and they have done nothing for it. They are now overproducing it to balance the books and it will run out earlier because of that. Will the right hon. Gentleman explain why the Government chose to spend all the money on paying for the extra unemployment that they created instead of investing it in British industry?

Mr. Tebbit: The right hon. and learned Gentleman talks as though it were he and the right hon. Member for Chesterfield, the former Secretary of State for Energy, who got out into the North sea, drilled the holes, built the platforms and got out the oil. It was private enterprise that did that. What is more, it was overwhelmingly those filthy, nasty multinationals that did it. Without them, the right hon. and learned Gentleman would have had no industry to hand over to us.

Mr. Smith: What did the Government spend the money on?

Mr. Tebbit: I promise to return to the right hon. and learned Gentleman's speech. He is a glutton for punishment tonight.
I listened carefully twice today to the speech of the hon. Member for Motherwell, South. I heard it not for the first time— nor, I fear, for the last—on BBC radio this morning. We heard it again this afternoon and, no doubt, we shall hear it when he next addresses us.

Dr. Bray: I hope that the right hon. Gentleman learnt from it.

Mr. Tebbit: I did learn from it. I learnt, for example, about the extraordinary ignorance, bias and partisanship of the Labour party—[Interruption.] —but not a word came from the hon. Member for Motherwell, South about the increase of 10 per cent. in manufactured exports in 1984. Does he know that our exports of manufactured goods expanded by 10 per cent. in 1984? Does he know that they expanded by 14 per cent. in the first quarter of this year compared with the first quarter of 1984? Does he know that these figures are reaching record levels?

Dr. Bray: rose —

Mr. Tebbit: Let us see if the hon. Gentleman answers my question. Did he know about those figures but preferred not to give them?

Dr. Bray: Perhaps the right hon. Gentleman's knowledge of arithmetic extends to the point that if one has exports and one takes away imports, one gets the balance. The balance for visible trade in January was minus £76 million; in February it was minus £270 million: and in March it was £900 million. That is what the right hon. Gentleman describes as an improvement in the trade position.

Mr. Tebbit: The hon. Gentleman, the House will have noticed, did not reply to my question.

Dr. Bray: rose —

Mr. Tebbit: No, the hon. Gentleman had his chance. Dr. Bray rose —

Mr. Tebbit: No, no, no. The hon. Gentleman had his chance and I will now deal with the point that he raises. [Interruption.] He knows full well that we have had five


years of surplus in our trade figures. He knows full well that there is a marked seasonal pattern to the trade figures in the early part of the year. He also knows that there were a number of major erratic items in those trade figures.

Dr. Bray: rose —

Mr. Tebbit: The hon. Gentleman knows full well that we shall be well on track for a surplus on our trade account again this year.

Dr. Bray: Look at the figures.

Mr. Tebbit: I am amazed that the hon. Member for Motherwell, South dismissed the CBI's view of the state of industry. On BBC radio this morning he said that the CBI's view was too weak to merit consideration. I say to him that, as a scientist, he should have some ability to read the trend lines on graphs and to read more than one of them. I urge him to examine the CBI report.

Dr. Bray: I urge the right hon. Gentleman to look at the figures. I hand them to him.

Mr. Tebbit: I am grateful to the hon. Gentleman.
In the CBI report he will find that the first question asks:
Are you more or less optimistic — than you were four months ago?
If the hon. Gentleman then takes the trend line, he will see a clear improvement. On page 5 the hon. Gentleman will see that in relation to the expected trend in volume of output in the next four months there is a level of optimism not exceeded since way back.

Dr. Bray: When we were in power.

Mr. Tebbit: It is always useful to look at the front page, too. [Interruption.] I will read from the hon. Gentleman's copy as he has taken the trouble to pass it to me. Page 1 states:
Demand for manufactures continued to grow over the last few months at a rather faster rate than in the last three Quarterly Surveys. This rate is expected to continue over the next few months. Demand has also become rather less of a constraint on output….
Output volume is reported to have grown faster than in the last three Surveys and its rate of growth is expected to accelerate over the next few months. The capital goods sector continued to grow rather faster than the average.
Capacity utilisation still remains broadly constant and has now remained static over the last four quarters. Given the increase in orders and output"․
[Interruption.] The hon. Member for Motherwell, South should not giggle. He should wait for the next sentence. It reads:
Given the increase in orders and output, this must reflect rising total capacity, probably due to the increased investment.
Investment is expected to continue rising over the next twelve months, at a slightly faster rate than in the January Survey.
How can the hon. Gentleman dismiss that evidence as too weak to merit consideration? The truth is that it did not fit his TUC brief, so he did not want to talk about it.
The hon. Gentleman does not have to restrict himself to studying the views of the CBI. He can consider the views of The Economist and The Times. The Economist this week said:
Between mid-1981 and the end of 1985, Britain's real gdp will have grown by about 2¾ per cent. a year. That is almost back to its average in the 1960s—making Britain the only country apart from America to have regained its earlier growth. More polemically, Britain had a slower growth rate than France in all

but one of the 19 years 1964–82; by December, its growth will have been faster in each of the three years 1983–85 … Britain is at last winning back some foreign markets: in the 12 months to the first quarter of 1985, the volume of its no-oil exports…grew by 12 per cent., which was probably more than the growth in world trade.
What has the right hon. and learned Member for Monklands, East to say about that? He does not want to know because it does not fit his prejudices.
We sometimes debate curiously unreal motions, but on this occasion the divide between the Opposition motion and the Government amendment is clear. I spent the early part of this debate at a conference of some 200 industrialists and exporters. If what the right hon. and learned Member for Monklands, East and his hon. Friend the Member for Motherwell, South have said about the state of industry and Government policy is right, one wonders why those who attended that conference were so cheerful. This has been the best CBI survey in years, so who are we to believe— industry, or bitter, negative, frustrated, out-of-office politicians?
It is no use the Labour party claiming support from industry because it has no such support. One has only to consider what a Labour Government would offer to the very people whom they claim to need—the high-tech employees. The right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) wants to inflict taxation on the rich—on everyone with more than £20,000 per year. The hon. Member for Oldham, West (Mr. Meacher) wants to stop tax relief on mortgage interest. A Labour Government would drive out of the country the very people they need to regenerate British industry. Out of office, the Labour party talks about support for industry and supports every strike, however bloody-minded and irrational. In the words of the right hon. Member for Sparkbrook:
It is an official strike and therefore it is right for the Labour Party to support it.
There is no doubt whatsoever that—

Mr. Michael Cocks: rose in his place and claimed to move, That the Question be now put.

Question, That the Question be now put, put and agreed to.

Question put accordingly, That the original words stand part of the Question:—

The House divided: Ayes 177, Noes 274.

Division No. 209]
[10 pm


AYES


Abse, Leo
Brown, N. (N'c'tle-u-Tyne E)


Archer, Rt Hon Peter
Brown, R. (N'c'tle-u-Tyne N)


Ashdown, Paddy
Buchan, Norman


Ashley, Rt Hon Jack
Callaghan, Rt Hon J.


Ashton, Joe
Campbell, Ian


Atkinson, N. (Tottenham)
Campbell-Savours, Dale


Bagier, Gordon A. T.
Canavan, Dennis


Banks, Tony (Newham NW)
Carlile, Alexander (Montg'y)


Barnett, Guy
Carter-Jones, Lewis


Barron, Kevin
Cartwright, John


Beckett, Mrs Margaret
Clark, Dr David (S Shields)


Beith, A. J.
Clarke, Thomas


Bell, Stuart
Clwyd, Mrs Ann


Benn, Tony
Cocks, Rt Hon M. (Bristol S.)


Bermingham, Gerald
Cohen, Harry


Bidwell, Sydney
Concannon, Rt Hon J. D.


Blair, Anthony
Cook, Frank (Stockton North)


Boothroyd, Miss Betty
Cook, Robin F. (Livingston)


Boyes, Roland
Corbyn, Jeremy


Bray, Dr Jeremy
Cowans, Harry


Brown, Gordon (D'f'mline E)
Crowther, Stan


Brown, Hugh D. (Provan)
Cunliffe, Lawrence






Cunningham, Dr John
Marek, Dr John


Davies, Rt Hon Denzil (L'lli)
Marshall, David (Shettleston)


Deakins, Eric
Martin, Michael


Dewar, Donald
Mason, Rt Hon Roy


Dixon, Donald
Maxton, John


Dobson, Frank
Maynard, Miss Joan


Dormand, Jack
Meacher, Michael


Douglas, Dick
Meadowcroft, Michael


Dubs, Alfred
Mikardo, Ian


Duffy, A. E. P.
Millan, Rt Hon Bruce


Dunwoody, Hon Mrs G.
Miller, Dr M. S. (E Kilbride)


Eadie, Alex
Mitchell, Austin (G't Grimsby)


Eastham, Ken
Morris, Rt Hon A. (W'shawe)


Evans, John (St. Helens N)
Nellist, David


Ewing, Harry
Oakes, Rt Hon Gordon


Field, Frank (Birkenhead)
O'Neill, Martin


Fisher, Mark
Orme, Rt Hon Stanley


Foot, Rt Hon Michael
Owen, Rt Hon Dr David


Forrester, John
Park, George


Foulkes, George
Parry, Robert


Fraser, J. (Norwood)
Patchett, Terry


Freeson, Rt Hon Reginald
Pavitt, Laurie


Freud. Clement
Pendry, Tom


George, Bruce
Penhaligon, David


Godman, Dr Norman
Pike, Peter


Golding, John
Powell, Raymond (Ogmore)


Gould, Bryan
Prescott, John


Gourlay, Harry
Radice, Giles


Hamilton, James (M'well N)
Randall, Stuart


Hamilton, W. W. (Central Fife)
Redmond, M.


Hancock, Mr. Michael
Rees, Rt Hon M. (Leeds S)


Hardy, Peter
Richardson, Ms Jo


Harman, Ms Harriet
Roberts, Ernest (Hackney N)


Harrison, Rt Hon Walter
Robertson, George


Hattersley, Rt Hon Roy
Robinson, G. (Coventry NW)


Healey, Rt Hon Denis
Rooker, J. W.


Heffer, Eric S.
Rowlands, Ted


Home Robertson, John
Ryman, John


Howell, Rt Hon D. (S'heath)
Sedgemore, Brian


Howells, Geraint
Sheerman, Barry


Hughes, Robert (Aberdeen N)
Short, Ms Clare (Ladywood)


Hughes, Roy (Newport East)
Silkin, Rt Hon J.


Hughes, Sean (Knowsley S)
Skinner, Dennis


Janner, Hon Greville
Smith, Rt Hon J. (M'kl'ds E)


John, Brynmor
Snape, Peter


Jones, Barry (Alyn &amp; Deeside)
Soley, Clive


Kaufman, Rt Hon Gerald
Spearing, Nigel


Kennedy, Charles
Stewart, Rt Hon D. (W Isles)


Kilroy-Silk, Robert
Strang, Gavin


Kirkwood, Archy
Thomas, Dafydd (Merioneth)


Lambie, David
Thomas, Dr R. (Carmarthen)


Lamond, James
Thompson, J. (Wansbeck)


Leadbitter, Ted
Thorne, Stan (Preston)


Leighton, Ronald
Tinn, James


Lewis, Ron (Carlisle)
Wallace, James


Lewis, Terence (Worsley)
Warden, Gareth (Gower)


Litherland, Robert
Weetch, Ken


Lloyd, Tony (Stretford)
Welsh, Michael


Loyden, Edward
Wigley, Dafydd


McCartney, Hugh
Williams, Rt Hon A.


McDonald, Dr Oonagh
Wilson, Gordon


McKay, Allen (Penistone)
Winnick, David


McKelvey, William
Wrigglesworth, Ian


MacKenzie, Rt Hon Gregor
Young, David (Bolton SE)


Maclennan, Robert



McNamara, Kevin
Tellers for the Ayes:


McTaggart, Robert
Mr. Frank Haynes and


McWilliam, John
Mr. Robin Corbett.


Madden, Max



NOES


Adley, Robert
Aspinwall, Jack


Aitken, Jonathan
Atkins, Rt Hon Sir H.


Alexander, Richard
Atkins, Robert (South Ribble)


Alison, Rt Hon Michael
Baker, Nicholas (N Dorset)


Amery, Rt Hon Julian
Baldry, Tony


Amess, David
Banks, Robert (Harrogate)


Ancram, Michael
Batiste, Spencer


Arnold, Tom
Beaumont-Dark, Anthony


Ashby, David
Bellingham, Henry



Bendall, Vivian
Gale, Roger


Benyon, William
Galley, Roy


Best, Keith
Gardiner, George (Reigate)


Bevan, David Gilroy
Garel-Jones, Tristan


Biffen, Rt Hon John
Glyn, Dr Alan


Biggs-Davison, Sir John
Goodhart, Sir Philip


Blackburn, John
Goodlad, Alastair


Blaker, Rt Hon Sir Peter
Gower, Sir Raymond


Body, Richard
Grant, Sir Anthony


Boscawen, Hon Robert
Greenway, Harry


Bottomley, Peter
Gregory, Conal


Bottomley, Mrs Virginia
Griffiths, Peter (Portsm'th N)


Bowden, A. (Brighton K'to'n)
Hamilton, Hon A. (Epsom)


Bowden, Gerald (Dulwich)
Hamilton, Neil (Tatton)


Boyson, Dr Rhodes
Hampson, Dr Keith


Brandon-Bravo, Martin
Hanley, Jeremy


Brinton, Tim
Hannam, John


Brown, M. (Brigg &amp; Cl'thpes)
Hargreaves, Kenneth


Browne, John
Harris, David


Bruinvels, Peter
Harvey, Robert


Bryan, Sir Paul
Haselhurst, Alan


Buchanan-Smith, Rt Hon A.
Havers, Rt Hon Sir Michael


Buck, Sir Antony
Hawkins, Sir Paul (SW N'folk)


Budgen, Nick
Hawksley, Warren


Bulmer, Esmond
Hayes, J.


Burt, Alistair
Hayhoe, Barney


Butcher, John
Hayward, Robert


Butler, Hon Adam
Heathcoat-Amory, David


Butterfill, John
Heddle, John


Carlisle, John (N Luton)
Henderson, Barry


Carlisle, Kenneth (Lincoln)
Hickmet, Richard


Carlisle, Rt Hon M. (W'ton S)
Hicks, Robert


Carttiss, Michael
Higgins, Rt Hon Terence L.


Cash, William
Hill, James


Chapman, Sydney
Hind, Kenneth


Chope, Christopher
Hogg, Hon Douglas (Gr'th'm)


Churchill, W. S.
Holland, Sir Philip (Gedling)


Clark, Dr Michael (Rochford)
Holt, Richard


Clark, Sir W. (Croydon S)
Hordern, Peter


Clarke, Rt Hon K. (Rushcliffe)
Howarth, Alan (Stratf'd-on-A)


Clegg, Sir Walter
Howarth, Gerald (Cannock)


Cockeram, Eric
Howell, Ralph (N Norfolk)


Colvin, Michael
Hunt, David (Wirral)


Coombs, Simon
Hunt, John (Ravensbourne)


Cope, John
Hunter, Andrew


Cormack, Patrick
Hurd, Rt Hon Douglas


Couchman, James
Jackson, Robert


Cranborne, Viscount
Johnson Smith, Sir Geoffrey


Critchley, Julian
Jones, Gwilym (Cardiff N)


Crouch, David
Jones, Robert (W Herts)


Currie, Mrs Edwina
Joseph, Rt Hon Sir Keith


Dickens, Geoffrey
Kellett-Bowman, Mrs Elaine


Dicks, Terry
Kershaw, Sir Anthony


Dorrell, Stephen
Key, Robert


Douglas-Hamilton, Lord J.
King, Roger (B'ham N'field)


Dover, Den
King, Rt Hon Tom


du Cann, Rt Hon Sir Edward
Knight, Gregory (Derby N)


Dunn, Robert
Knight, Mrs Jill (Edgbaston)


Durant, Tony
Knowles, Michael


Edwards, Rt Hon N. (P'broke)
Knox, David


Eggar, Tim
Lamont, Norman


Emery, Sir Peter
Lang, Ian


Evennett, David
Latham, Michael


Eyre, Sir Reginald
Lawler, Geoffrey


Fairbairn, Nicholas
Lawrence, Ivan


Fallon, Michael
Lawson, Rt Hon Nigel


Farr, Sir John
Lee, John (Pendle)


Favell, Anthony
Leigh, Edward (Gainsbor'gh)


Fenner, Mrs Peggy
Lennox-Boyd, Hon Mark


Finsberg, Sir Geoffrey
Lester, Jim


Fookes, Miss Janet
Lewis, Sir Kenneth (Stamf'd)


Forman, Nigel
Lightbown, David


Forsyth, Michael (Stirling)
Lilley, Peter


Forth, Eric
Lloyd, Ian (Havant)


Fowler, Rt Hon Norman
Lord, Michael


Fox, Marcus
Luce, Richard


Franks, Cecil
Lyell, Nicholas


Fraser, Peter (Angus East)
McCrindle, Robert


Freeman, Roger
McCurley, Mrs Anna


Fry, Peter
Macfarlane, Neil

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 33 (Questions on amendments):—

The House divided: Ayes 272, Noes 178.

Division No. 209]
[10 pm


AYES


Abse, Leo
Brown, N. (N'c'tle-u-Tyne E)


Archer, Rt Hon Peter
Brown, R. (N'c'tle-u-Tyne N)


Ashdown, Paddy
Buchan, Norman


Ashley, Rt Hon Jack
Callaghan, Rt Hon J.


Ashton, Joe
Campbell, Ian


Atkinson, N. (Tottenham)
Campbell-Savours, Dale


Bagier, Gordon A. T.
Canavan, Dennis


Banks, Tony (Newham NW)
Carlile, Alexander (Montg'y)


Barnett, Guy
Carter-Jones, Lewis


Barron, Kevin
Cartwright, John


Beckett, Mrs Margaret
Clark, Dr David (S Shields)


Beith, A. J.
Clarke, Thomas


Bell, Stuart
Clwyd, Mrs Ann


Benn, Tony
Cocks, Rt Hon M. (Bristol S.)


Bermingham, Gerald
Cohen, Harry


Bidwell, Sydney
Concannon, Rt Hon J. D.


Blair, Anthony
Cook, Frank (Stockton North)


Boothroyd, Miss Betty
Cook, Robin F. (Livingston)


Boyes, Roland
Corbyn, Jeremy


Bray, Dr Jeremy
Cowans, Harry


Brown, Gordon (D'f'mline E)
Crowther, Stan


Brown, Hugh D. (Provan)
Cunliffe, Lawrence






Cunningham, Dr John
Marek, Dr John


Davies, Rt Hon Denzil (L'lli)
Marshall, David (Shettleston)


Deakins, Eric
Martin, Michael


Dewar, Donald
Mason, Rt Hon Roy


Dixon, Donald
Maxton, John


Dobson, Frank
Maynard, Miss Joan


Dormand, Jack
Meacher, Michael


Douglas, Dick
Meadowcroft, Michael


Dubs, Alfred
Mikardo, Ian


Duffy, A. E. P.
Millan, Rt Hon Bruce


Dunwoody, Hon Mrs G.
Miller, Dr M. S. (E Kilbride)


Eadie, Alex
Mitchell, Austin (G't Grimsby)


Eastham, Ken
Morris, Rt Hon A. (W'shawe)


Evans, John (St. Helens N)
Nellist, David


Ewing, Harry
Oakes, Rt Hon Gordon


Field, Frank (Birkenhead)
O'Neill, Martin


Fisher, Mark
Orme, Rt Hon Stanley


Foot, Rt Hon Michael
Owen, Rt Hon Dr David


Forrester, John
Park, George


Foulkes, George
Parry, Robert


Fraser, J. (Norwood)
Patchett, Terry


Freeson, Rt Hon Reginald
Pavitt, Laurie


Freud. Clement
Pendry, Tom


George, Bruce
Penhaligon, David


Godman, Dr Norman
Pike, Peter


Golding, John
Powell, Raymond (Ogmore)


Gould, Bryan
Prescott, John


Gourlay, Harry
Radice, Giles


Hamilton, James (M'well N)
Randall, Stuart


Hamilton, W. W. (Central Fife)
Redmond, M.


Hancock, Mr. Michael
Rees, Rt Hon M. (Leeds S)


Hardy, Peter
Richardson, Ms Jo


Harman, Ms Harriet
Roberts, Ernest (Hackney N)


Harrison, Rt Hon Walter
Robertson, George


Hattersley, Rt Hon Roy
Robinson, G. (Coventry NW)


Healey, Rt Hon Denis
Rooker, J. W.


Heffer, Eric S.
Rowlands, Ted


Home Robertson, John
Ryman, John


Howell, Rt Hon D. (S'heath)
Sedgemore, Brian


Howells, Geraint
Sheerman, Barry


Hughes, Robert (Aberdeen N)
Short, Ms Clare (Ladywood)


Hughes, Roy (Newport East)
Silkin, Rt Hon J.


Hughes, Sean (Knowsley S)
Skinner, Dennis


Janner, Hon Greville
Smith, Rt Hon J. (M'kl'ds E)


John, Brynmor
Snape, Peter


Jones, Barry (Alyn &amp; Deeside)
Soley, Clive


Kaufman, Rt Hon Gerald
Spearing, Nigel


Kennedy, Charles
Stewart, Rt Hon D. (W Isles)


Kilroy-Silk, Robert
Strang, Gavin


Kirkwood, Archy
Thomas, Dafydd (Merioneth)


Lambie, David
Thomas, Dr R. (Carmarthen)


Lamond, James
Thompson, J. (Wansbeck)


Leadbitter, Ted
Thorne, Stan (Preston)


Leighton, Ronald
Tinn, James


Lewis, Ron (Carlisle)
Wallace, James


Lewis, Terence (Worsley)
Warden, Gareth (Gower)


Litherland, Robert
Weetch, Ken


Lloyd, Tony (Stretford)
Welsh, Michael


Loyden, Edward
Wigley, Dafydd


McCartney, Hugh
Williams, Rt Hon A.


McDonald, Dr Oonagh
Wilson, Gordon


McKay, Allen (Penistone)
Winnick, David


McKelvey, William
Wrigglesworth, Ian


MacKenzie, Rt Hon Gregor
Young, David (Bolton SE)


Maclennan, Robert



McNamara, Kevin
Tellers for the Ayes:


McTaggart, Robert
Mr. Frank Haynes and


McWilliam, John
Mr. Robin Corbett.


Madden, Max



NOES


Adley, Robert
Aspinwall, Jack


Aitken, Jonathan
Atkins, Rt Hon Sir H.


Alexander, Richard
Atkins, Robert (South Ribble)


Alison, Rt Hon Michael
Baker, Nicholas (N Dorset)


Amery, Rt Hon Julian
Baldry, Tony


Amess, David
Banks, Robert (Harrogate)


Ancram, Michael
Batiste, Spencer


Arnold, Tom
Beaumont-Dark, Anthony


Ashby, David
Bellingham, Henry



Bendall, Vivian
Gale, Roger


Benyon, William
Galley, Roy


Best, Keith
Gardiner, George (Reigate)


Bevan, David Gilroy
Garel-Jones, Tristan


Biffen, Rt Hon John
Glyn, Dr Alan


Biggs-Davison, Sir John
Goodhart, Sir Philip


Blackburn, John
Goodlad, Alastair


Blaker, Rt Hon Sir Peter
Gower, Sir Raymond


Body, Richard
Grant, Sir Anthony


Boscawen, Hon Robert
Greenway, Harry


Bottomley, Peter
Gregory, Conal


Bottomley, Mrs Virginia
Griffiths, Peter (Portsm'th N)


Bowden, A. (Brighton K'to'n)
Hamilton, Hon A. (Epsom)


Bowden, Gerald (Dulwich)
Hamilton, Neil (Tatton)


Boyson, Dr Rhodes
Hampson, Dr Keith


Brandon-Bravo, Martin
Hanley, Jeremy


Brinton, Tim
Hannam, John


Brown, M. (Brigg &amp; Cl'thpes)
Hargreaves, Kenneth


Browne, John
Harris, David


Bruinvels, Peter
Harvey, Robert


Bryan, Sir Paul
Haselhurst, Alan


Buchanan-Smith, Rt Hon A.
Havers, Rt Hon Sir Michael


Buck, Sir Antony
Hawkins, Sir Paul (SW N'folk)


Budgen, Nick
Hawksley, Warren


Bulmer, Esmond
Hayes, J.


Burt, Alistair
Hayhoe, Barney


Butcher, John
Hayward, Robert


Butler, Hon Adam
Heathcoat-Amory, David


Butterfill, John
Heddle, John


Carlisle, John (N Luton)
Henderson, Barry


Carlisle, Kenneth (Lincoln)
Hickmet, Richard


Carlisle, Rt Hon M. (W'ton S)
Hicks, Robert


Carttiss, Michael
Higgins, Rt Hon Terence L.


Cash, William
Hill, James


Chapman, Sydney
Hind, Kenneth


Chope, Christopher
Hogg, Hon Douglas (Gr'th'm)


Churchill, W. S.
Holland, Sir Philip (Gedling)


Clark, Dr Michael (Rochford)
Holt, Richard


Clark, Sir W. (Croydon S)
Hordern, Peter


Clarke, Rt Hon K. (Rushcliffe)
Howarth, Alan (Stratf'd-on-A)


Clegg, Sir Walter
Howarth, Gerald (Cannock)


Cockeram, Eric
Howell, Ralph (N Norfolk)


Colvin, Michael
Hunt, David (Wirral)


Coombs, Simon
Hunt, John (Ravensbourne)


Cope, John
Hunter, Andrew


Cormack, Patrick
Hurd, Rt Hon Douglas


Couchman, James
Jackson, Robert


Cranborne, Viscount
Johnson Smith, Sir Geoffrey


Critchley, Julian
Jones, Gwilym (Cardiff N)


Crouch, David
Jones, Robert (W Herts)


Currie, Mrs Edwina
Joseph, Rt Hon Sir Keith


Dickens, Geoffrey
Kellett-Bowman, Mrs Elaine


Dicks, Terry
Kershaw, Sir Anthony


Dorrell, Stephen
Key, Robert


Douglas-Hamilton, Lord J.
King, Roger (B'ham N'field)


Dover, Den
King, Rt Hon Tom


du Cann, Rt Hon Sir Edward
Knight, Gregory (Derby N)


Dunn, Robert
Knight, Mrs Jill (Edgbaston)


Durant, Tony
Knowles, Michael


Edwards, Rt Hon N. (P'broke)
Knox, David


Eggar, Tim
Lamont, Norman


Emery, Sir Peter
Lang, Ian


Evennett, David
Latham, Michael


Eyre, Sir Reginald
Lawler, Geoffrey


Fairbairn, Nicholas
Lawrence, Ivan


Fallon, Michael
Lawson, Rt Hon Nigel


Farr, Sir John
Lee, John (Pendle)


Favell, Anthony
Leigh, Edward (Gainsbor'gh)


Fenner, Mrs Peggy
Lennox-Boyd, Hon Mark


Finsberg, Sir Geoffrey
Lester, Jim


Fookes, Miss Janet
Lewis, Sir Kenneth (Stamf'd)


Forman, Nigel
Lightbown, David


Forsyth, Michael (Stirling)
Lilley, Peter


Forth, Eric
Lloyd, Ian (Havant)


Fowler, Rt Hon Norman
Lord, Michael


Fox, Marcus
Luce, Richard


Franks, Cecil
Lyell, Nicholas


Fraser, Peter (Angus East)
McCrindle, Robert


Freeman, Roger
McCurley, Mrs Anna


Fry, Peter
Macfarlane, Neil




MacKay, Andrew (Berkshire)
Portillo, Michael


MacKay, John (Argyll &amp; Bute)
Powell, Rt Hon J. E. (S Down)


Maclean, David John
Powell, William (Corby)


McNair-Wilson, P. (New F'st)
Powley, John


McQuarrie, Albert
Price, Sir David


Madel, David
Prior, Rt Hon James


Major, John
Proctor, K. Harvey


Malins, Humfrey
Raffan, Keith


Malone, Gerald
Rathbone, Tim


Maples, John
Rhodes James, Robert


Marland, Paul
Rhys Williams, Sir Brandon


Marlow, Antony
Ridley, Rt Hon Nicholas


Marshall, Michael (Arundel)
Rifkind, Malcolm


Mates, Michael
Robinson, Mark (N'port W)


Mather, Carol
Roe, Mrs Marion


Maude, Hon Francis
Rossi, Sir Hugh


Mawhinney, Dr Brian
Rowe, Andrew


Maxwell-Hyslop, Robin
Ryder, Richard


Mayhew, Sir Patrick
Sackville, Hon Thomas


Mellor, David
Sainsbury, Hon Timothy


Merchant, Piers
St. John-Stevas, Rt Hon N.


Meyer, Sir Anthony
Scott, Nicholas


Miller, Hal (B'grove)
Shaw, Giles (Pudsey)


Mills, lain (Meriden)
Smith, Sir Dudley (Warwick)


Mills, Sir Peter (West Devon)
Speed, Keith


Miscampbell, Norman
Stanbrook, Ivor


Mitchell, David (NW Hants)
Stevens, Martin (Fulham)


Moate, Roger
Stewart, Andrew (Sherwood)


Monro, Sir Hector
Stokes, John


Montgomery, Sir Fergus
Taylor, John (Solihull)


Moore, John
Tebbit, Rt Hon Norman


Morris, M. (N'hampton, S)
Thompson, Donald (Calder V)


Moynihan, Hon C.
Thompson, Patrick (N'ich N)


Neale, Gerrard
Thurnham, Peter


Needham, Richard
Townsend, Cyril D. (B'heath)


Nelson, Anthony
Tracey, Richard


Newton, Tony
Trotter, Neville


Nicholls, Patrick
Viggers, Peter


Normanton, Tom
Walden, George


Norris, Steven
Walker, Bill (T'side N)


Oppenheim, Phillip
Wall, Sir Patrick


Osborn, Sir John
Wardle, C. (Bexhill)


Ottaway, Richard
Watts, John


Page, Richard (Herts SW)
Wiggin, Jerry


Parkinson, Rt Hon Cecil
Wilkinson, John


Parris, Matthew
Yeo, Tim


Patten, Christopher (Bath)



Pattie, Geoffrey
Tellers for the Noes:


Pawsey, James
Mr. Michael Neubert and


Pollock, Alexander
Mr. Peter Lloyd.

Division No. 2101
[10.15 pm


AYES


Adley, Robert
Benyon, William


Aitken, Jonathan
Best, Keith


Alexander, Richard
Bevan, David Gilroy


Alison, Rt Hon Michael
Biffen, Rt Hon John


Amery, Rt Hon Julian
Biggs-Davison, Sir John


Amess, David
Blackburn, John


Ancram, Michael
Blaker, Rt Hon Sir Peter


Arnold, Tom
Body, Richard


Ashby, David
Boscawen, Hon Robert


Aspinwall, Jack
Bottomley, Peter


Atkins, Rt Hon Sir H.
Bottomley, Mrs Virginia


Atkins, Robert (South Ribble)
Bowden, A. (Brighton K'to'n)


Baker, Nicholas (N Dorset)
Bowden, Gerald (Dulwich)


Baldry, Tony
Boyson, Dr Rhodes


Banks, Robert (Harrogate)
Brandon-Bravo, Martin


Batiste, Spencer
Brinton, Tim


Beaumont-Dark, Anthony
Brown, M. (Brigg &amp; Cl'thpes)


Bellingham, Henry
Browne, John


Bendall, Vivian
Bruinvels, Peter



Bryan, Sir Paul
Havers, Rt Hon Sir Michael


Buchanan-Smith, Rt Hon A.
Hawkins, Sir Paul (SW N'folk)


Buck, Sir Antony
Hawksley, Warren


Budgen, Nick
Hayes, J.


Bulmer, Esmond
Hayhoe, Barney


Burt, Alistair
Hayward, Robert


Butcher, John
Heathcoat-Amory, David


Butler, Hon Adam
Heddle, John


Butterfill, John
Henderson, Barry


Carlisle, John (N Luton)
Hickmet, Richard


Carlisle, Kenneth (Lincoln)
Hicks, Robert


Carlisle, Rt Hon M. (W'ton S)
Higgins, Rt Hon Terence L.


Carttiss, Michael
Hill, James


Cash, William
Hind, Kenneth


Chapman, Sydney
Hogg, Hon Douglas (Gr'th'm)


Chope, Christopher
Holland, Sir Philip (Gedling)


Churchill, W. S.
Holt, Richard


Clark, Dr Michael (Rochford)
Hordern, Peter


Clark, Sir W. (Croydon S)
Howarth, Alan (Stratf'd-on-A)


Clarke, Rt Hon K. (Rushcliffe)
Howarth, Gerald (Cannock)


Clegg, Sir Walter
Howell, Ralph (N Norfolk)


Cockeram, Eric
Hunt, David (Wirral)


Colvin, Michael
Hunt, John (Ravensbourne)


Coombs, Simon
Hunter, Andrew


Cope, John
Hurd, Rt Hon Douglas


Cormack, Patrick
Jackson, Robert


Couchman, James
Johnson Smith, Sir Geoffrey


Cranborne, Viscount
Jones, Gwilym (Cardiff N)


Critchley, Julian
Jones, Robert (W Herts)


Crouch, David
Joseph, Rt Hon Sir Keith


Currie, Mrs Edwina
Kellett-Bowman, Mrs Elaine


Dickens, Geoffrey
Kershaw, Sir Anthony


Dicks, Terry
Key, Robert


Dorrell, Stephen
King, Roger (B'ham N'field)


Douglas-Hamilton, Lord J.
King, Rt Hon Tom


Dover, Den
Knight, Gregory (Derby N)


du Cann, Rt Hon Sir Edward
Knight, Mrs Jill (Edgbaston)


Dunn, Robert
Knowles, Michael


Edwards, Rt Hon N. (P'broke)
Knox, David


Eggar, Tim
Lamont, Norman


Emery, Sir Peter
Lang, Ian


Evennett, David
Latham, Michael


Eyre, Sir Reginald
Lawler, Geoffrey


Fairbairn, Nicholas
Lawrence, Ivan


Fallon, Michael
Lawson, Rt Hon Nigel


Farr, Sir John
Lee, John (Pendle)


Favell, Anthony
Leigh, Edward (Gainsbor'gh)


Fenner, Mrs Peggy
Lennox-Boyd, Hon Mark


Finsberg, Sir Geoffrey
Lester, Jim


Fookes, Miss Janet
Lewis, Sir Kenneth (Stamf'd)


Forman, Nigel
Lightbown, David


Forsyth, Michael (Stirling)
Lilley, Peter


Forth, Eric
Lloyd, Ian (Havant)


Fowler, Rt Hon Norman
Lord, Michael


Fox, Marcus
Luce, Richard


Franks, Cecil
Lyell, Nicholas


Fraser, Peter (Angus East)
McCrindle, Robert


Freeman, Roger
McCurley, Mrs Anna


Fry, Peter
Macfarlane, Neil


Gale, Roger
MacKay, Andrew (Berkshire)


Galley, Roy
MacKay, John (Argyll &amp; Bute)


Gardiner, George (Reigate)
Maclean, David John


Garel-Jones, Tristan
McNair-Wilson, P. (New F'st)


Glyn, Dr Alan
McQuarrie, Albert


Goodhart, Sir Philip
Madel, David


Goodlad, Alastair
Major, John


Gower, Sir Raymond
Malins, Humfrey


Grant, Sir Anthony
Malone, Gerald


Greenway, Harry
Maples, John


Gregory, Conal
Marland, Paul


Griffiths, Peter (Portsm'th N)
Marlow, Antony


Hamilton, Hon A. (Epsom)
Marshall, Michael (Arundel)


Hamilton, Neil (Tatton)
Mates, Michael


Hampson, Dr Keith
Mather, Carol


Hanley, Jeremy
Maude, Hon Francis


Hannam, John
Mawhinney, Dr Brian


Hargreaves, Kenneth
Maxwell-Hyslop, Robin


Harris, David
Mayhew, Sir Patrick


Harvey, Robert
Mellor, David


Haselhurst, Alan
Merchant, Piers






Meyer, Sir Anthony
Rhys Williams, Sir Brandon


Miller, Hal (B'grove)
Ridley, Rt Hon Nicholas


Mills, Iain (Meriden)
Rifkind, Malcolm


Mills, Sir Peter (West Devon)
Rippon, Rt Hon Geoffrey


Miscampbell, Norman
Robinson, Mark (N'port W)


Mitchell, David (NW Hants)
Roe, Mrs Marion


Moate, Roger
Rossi, Sir Hugh


Monro, Sir Hector
Rowe, Andrew


Montgomery, Sir Fergus
Ryder, Richard


Moore, John
Sackville, Hon Thomas


Morris, M. (N'hampton, S)
Sainsbury, Hon Timothy


Moynihan, Hon C.
St. John-Stevas, Rt Hon N.


Neale, Gerrard
Scott, Nicholas


Needham, Richard
Shaw, Giles (Pudsey)


Nelson, Anthony
Smith, Sir Dudley (Warwick)


Neubert, Michael
Speed, Keith


Newton, Tony
Stanbrook, Ivor


Nicholls, Patrick
Stevens, Martin (Fulham)


Normanton, Tom
Stewart, Andrew (Sherwood)


Norris, Steven
Stokes, John


Oppenheim, Phillip
Taylor, John (Solihull)


Osborn, Sir John
Tebbit, Rt Hon Norman


Ottaway, Richard
Thompson, Donald (Calder V)


Page, Richard (Herts SW)
Thompson, Patrick (N'ich N)


Parkinson, Rt Hon Cecil
Thurnham, Peter


Parris, Matthew
Townsend, Cyril D. (B'heath)


Patten, Christopher (Bath)
Tracey, Richard


Pattie, Geoffrey
Viggers, Peter


Pawsey, James
Walden, George


Pollock, Alexander
Walker, Bill (T'side N)


Portillo, Michael
Wall, Sir Patrick


Powell, William (Corby)
Wardle, C. (Bexhill)


Powley, John
Wiggin, Jerry


Price, Sir David
Wilkinson, John


Prior, Rt Hon James
Yeo, Tim


Proctor, K. Harvey



Raffan, Keith
Tellers for the Ayes:


Rathbone, Tim
Mr. Peter Lloyd and


Rhodes James, Robert
Mr. Tony Durant.




NOES


Abse, Leo
Concannon, Rt Hon J. D.


Archer, Rt Hon Peter
Cook, Frank (Stockton North)


Ashdown, Paddy
Cook, Robin F. (Livingston)


Ashley, Rt Hon Jack
Corbett, Robin


Ashton, Joe
Corbyn, Jeremy


Atkinson, N. (Tottenham)
Cowans, Harry


Bagier, Gordon A. T.
Crowther, Stan


Banks, Tony (Newham NW)
Cunliffe, Lawrence


Barnett, Guy
Cunningham, Dr John


Barron, Kevin
Deakins, Eric


Beckett, Mrs Margaret
Dewar, Donald


Beith, A. J.
Dixon, Donald


Bell, Stuart
Dobson, Frank


Benn, Tony
Dormand, Jack


Bermingham, Gerald
Douglas, Dick


Bidwell, Sydney
Dubs, Alfred


Blair, Anthony
Duffy, A. E. P.


Boothroyd, Miss Betty
Dunwoody, Hon Mrs G.


Boyes, Roland
Eadie, Alex


Bray, Dr Jeremy
Eastham, Ken


Brown, Gordon (D'f'mline E)
Evans, John (St. Helens N)


Brown, Hugh D. (Provan)
Ewing, Harry


Brown, N. (N'c'tle-u-Tyne E)
Field, Frank (Birkenhead)


Brown, R. (N'c'tle-u-Tyne N)
Fisher, Mark


Buchan, Norman
Foot, Rt Hon Michael


Callaghan, Rt Hon J.
Forrester, John


Campbell, Ian
Foulkes, George


Campbell-Savours, Dale
Fraser, J. (Norwood)


Canavan, Dennis
Freeson, Rt Hon Reginald


Carlile, Alexander (Montg'y)
Freud, Clement


Carter-Jones, Lewis
George, Bruce


Cartwright, John
Godman, Dr Norman


Clark, Dr David (S Shields)
Golding, John


Clarke, Thomas
Gould, Bryan


Clwyd, Mrs Ann
Gourlay, Harry


Cocks, Rt Hon M. (Bristol S.)
Hamilton, James (M'well N)


Cohen, Harry
Hamilton, W. W. (Central Fife)



Hancock, Mr. Michael
O'Neill, Martin


Hardy, Peter
Orme, Rt Hon Stanley


Harman, Ms Harriet
Owen, Rt Hon Dr David


Harrison, Rt Hon Walter
Park, George


Hattersley, Rt Hon Roy
Patchett, Terry


Healey, Rt Hon Denis
Pavitt, Laurie


Heffer, Eric S.
Pendry, Tom


Home Robertson, John
Penhaligon, David


Howell, Rt Hon D. (S'heath)
Pike, Peter


Howells, Geraint
Powell, Raymond (Ogmore)


Hughes, Robert (Aberdeen N)
Prescott, John


Hughes, Roy (Newport East)
Radice, Giles


Janner, Hon Greville
Randall, Stuart


John, Brynmor
Redmond, M.


Kaufman, Rt Hon Gerald
Rees, Rt Hon M. (Leeds S)


Kennedy, Charles
Richardson, Ms Jo


Kilroy-Silk, Robert
Roberts, Ernest (Hackney N)


Kirkwood, Archy
Robertson, George


Lambie, David
Robinson, G. (Coventry NW)


Lamond, James
Rooker, J. W.


Leadbitter, Ted
Rowlands, Ted


Leighton, Ronald
Ryman, John


Lewis, Ron (Carlisle)
Sedgemore, Brian


Lewis, Terence (Worsley)
Sheerman, Barry


Litherland, Robert
Short, Ms Clare (Ladywood)


Lloyd, Tony (Stretford)
Silkin, Rt Hon J.


Loyden, Edward
Skinner, Dennis


McCartney, Hugh
Smith, Rt Hon J. (M'kl'ds E)


McDonald, Dr Oonagh
Snape, Peter


McKay, Allen (Penistone)
Soley, Clive


McKelvey, William
Spearing, Nigel


MacKenzie, Rt Hon Gregor
Stewart, Rt Hon D, (W Isles)


Maclennan, Robert
Strang, Gavin


McNamara, Kevin
Thomas, Dafydd (Merioneth)


McTaggart, Robert
Thomas, Dr R. (Carmarthen)


McWilliam, John
Thompson, J. (Wansbeck)


Madden, Max
Thorne, Stan (Preston)


Marek, Dr John
Tinn, James


Marshall, David (Shettleston)
Wallace, James


Martin, Michael
Wardell, Gareth (Gower)


Mason, Rt Hon Roy
Weetch, Ken


Maxton, John
Welsh, Michael


Maynard, Miss Joan
Wigley, Dafydd


Meacher, Michael
Williams, Rt Hon A.


Meadowcroft, Michael
Wilson, Gordon


Mikardo, Ian
Winnick, David


Millan, Rt Hon Bruce
Wrigglesworth, Ian


Miller, Dr M. S. (E Kilbride)
Young, David (Bolton SE)


Mitchell, Austin (G't Grimsby)



Morris, Rt Hon A. (W'shawe)
Tellers for the Noes:


Nellist, David
Mr. Frank Haynes and


Oakes, Rt Hon Gordon
Mr. Sean Hughes.

Question accordingly agreed to.

Mr. Speaker: forthwith declared the main Question, as amended, to be agreed to.
Resolved,
That this House welcomes the recent substantial increase in manufacturing output, the sharp rise in exports, the major gains in the competitiveness of British industry, and the improved optimism of independent bodies such as the Confederation of British Industry; congratulates the Government on the measures it has taken to assist the recovery of British Industry through its support for innovation programme, support for investment, support for exports, business and technical advisory services, assistance with education and training and in particular today's Export for Jobs seminar and the commencement of Local Enterprise Week, as well as its policies to improve the economic climate in which business operates; and regrets the Opposition's willingness to support every single strike no matter what the cost, its reactionary and damaging policies in favour of increased taxation further nationalisation, and greater state intervention, its policies of deplorable fiscal irresponsibility, incompatible with the restraint of inflation and enhancement of competitiveness, and its eagerness to seek partisan gain at the expense of British industry and jobs.

Unfair Dismissal

The Parliamentary Under-Secretary of State for Employment (Mr. Peter Bottomley): I beg to move.
That the draft Unfair Dismissal (Variation of Qualifying Period) Order 1985, which was laid before this House on 17th April, be approved.
Under the provisions of the employment protection legislation currently in force, employees have a right to complain to an industrial tribunal of unfair dismissal after one year's service with an employer or after two years with an employer of 20 or fewer employees. The purpose of the draft order — article 3(1) — is to standardise this qualifying period at two years for all employees. The change will not affect the qualifying period of one month in respect of unfair dismissal following suspension on medical grounds, nor will it affect the right not to be dismissed unfairly at any time because of membership or non-membership of a trade union or because of taking part in trade union activities, where no qualifying period is required.
Employees who work between eight and 16 hours a week will continue, as now, to have a qualifying period of five years. This order will have no effect on the protection afforded to employees under the sex discrimination and race relations legislation.
It is intended that the order should come into force on 1 June 1985. It will apply only to employees starting to work for an employer on or after that date. We believe that, in spite of the changes we have made since 1979, the employment protection legislation, in particular in the provisions relating to unfair dismissal, still discourage firms from taking more people on. The Government are deeply concerned about the level of unemployment, but there are few simple solutions to the problem. The White Paper "Employment The Challenge for the Nation" sets out our views on what the nation as a whole must do to create jobs and reduce unemployment.
Government cannot alone create jobs. Their key contribution is to create an economic climate in which enterprises can flourish. They can, and do, also provide direct help for those worst affected by unemployment. Government can help to improve the operation of the labour market by encouraging better training, more flexibility and fewer barriers of regulation and cost.
The changes introduced by the order are part of this strategy. I am interested in doing all we can to create the conditions in which more new jobs can be created. It is important that we should take all reasonable steps to remove the barriers that might be standing in the way. In this case the barrier relates to employers who want to take on more people but are afraid to do so because of their fear of being taken to industrial tribunals.

Mr. John Evans: rose —

Mr. Bottomley: I hope that the hon. Gentleman will not mind, but I should like to continue with this point.
I think it is common ground among us that employees should have a right to protection against unfair dismissal after a reasonable period of service. I think it is also common ground that such protection should not generally be available immediately but that there should be a period of service during which time the employer has an

opportunity to decide whether he wishes to retain a new employee. The length of this qualifying period is a matter for judgment and opinions on what is right may change.
Our judgment at the present time—in the light of the paramount importance of reducing unemployment— is that two years is a reasonable period for an employer to have to decide whether an employee should be retained, while the position of employees who have demonstrated their commitment to an employer over such a period is also safeguarded. The change will also bring the qualifying period for unfair dismissal claims into line with the long-standing two-year qualifying periods for redundancy payments, maternity pay and the right to return because of absence due to pregnancy.
We believe that the change will have an important psychological effect. Employers will be more ready at the margin to take a chance and to employ people in the knowledge that they will have two years in which to see whether things work—

Mr. Evans: Will the Minister give way before he sits down?

Mr. Bottomley: I am not giving way at the moment. Employers will be more ready at the margin to take a change and to employ people in the knowledge that they will have two years in which to see whether things work out as they hope, without the fear of being taken to an industrial tribunal.
But I must repeat that the right to complain to an industrial tribunal will remain, and I make no apology for that. Employees who have invested two or more years of their lives with an employer are entitled to safeguards. Employers should look after their employees in the same way as they would any other investment and make sure that they do not dismiss them without good reason. While it is inevitable that some dismissals will end up with the employer being taken to an industrial tribunal, most employers and employees would agree that this is something to be avoided. The best way of avoiding or minimising such cases is to agree and stick to disciplinary and grievance procedures so that both management and employees know where they stand. The employment protection legislation has had the effect of making such procedures more widely available, and I think this is wholly desirable. I commend this order to the House.

Mr. John Evans: The House will have noted that I attempted twice to intervene in the Minister's speech because I realised that he had an extremely short speech. Probably that was because he is ashamed of the order that he is bringing before the House. If he is not ashamed, he should be.
This order is just one more step along the road to the dismantling of the Labour Government's employment protection legislation. It is another element of the Tory Government's attack on working people and the dismantling of the welfare state. Previous Labour Governments started to build a framework of reasonable provision of pensions and social security benefits and a humane regime of protection in the workplace in terms of employment, health and safety, the right to belong to a trade union and against the worst excesses of unfair and arbitrary dismissal by an employer.
Since the Government took office we have seen a steady erosion of welfare state provision. We on the


Labour Benches note with anger the Government's apparent determination to abolish the state earnings-related pension scheme which workers are currently paying for, just as we recall with contempt the Government's swindling of the workers when they abolished the six months' earnings-related unemployment benefit supplement which, again, workers had paid for.
Now the Tories are extending from one to two years the period during which an employer will be free to sack unfairly his employees. I pose this question to the Minister and to every Tory Back Bencher: why should an employer have the right to sack anyone unfairly at any time? If the Minister wishes to intervene, I will give way.

Mr. Douglas Hogg: If there were merit in the hon. Member's argument, why did his Government include a threshold in the first place?

Mr. Evans: I will come to that point in a moment, because I was one of those who served on the Committee that dealt with the original legislation on trade unions and labour relations.
Why should there be any qualifying period of two years, one year or 26 weeks during which a worker is exposed to the whims of an employer who can sack him or her on the spot?

Mr. Hogg: What is the answer?

Mr. Evans: I will come to the answer shortly.
Why should an employer have the right to sack anyone unfairly at any time? That is the issue. Is it not an absurdity, if not an obscenity, that Parliament is enacting legislation which instructs an employer that he cannot sack a worker who has been in his employ for two years or more, yet which at the same time gives that employer the freedom to sack any of his workers for whatever reason, no matter how unfairly, provided the worker has not completed the two-year qualification period of employment?
Let us consider the official reason for the order. We are told that it will enable employers to take on more workers. The Minister said as much in his speech tonight. The Secretary of State for Employment said so in the Budget debate:
Employment protection legislation, especially the unfair dismisal provisions, causes small employers anxieties about the difficulties of such procedures and makes them reluctant to take on more employees.
Later he said:
We have already since 1979 taken some major steps to make the industrial tribunal system simpler for employers, but I accept that despite the changes the burden of this legislation can deter employers from recruiting more people." —[0fficial Report, 21 March 1985; Vol. 75, c. 1023–24.]
The Chancellor of the Exchequer said the same in his Budget statement:
The qualifying period for unfair dismissal claims will thus become two years for all new employees. This is a reasonable period of time and should lessen the reluctance of some employers to take on new people. — [Official Report, 19 March 1985; Vol. 75, c. 794.)
Neither of those right hon. Gentlemen offered a shred of evidence to justify those sentiments and neither did the Minister this evening. All that we get from opponents of Labour's employment legislation is anecdotal saloon bar evidence and vicious propaganda from Tory Members. It is offered in the same fashion as the so-called evidence of the need to abolish the wages councils, and frequently by the same people. We are told that the lowest paid are paid

too much, thanks to the councils. It is rather surprising that we are not getting evidence to justify the Government's claim that dismantling Labour's employment legislation
will create jobs. When the Conservative Government took office in 1979, the qualifying period laid down by the
Labour Government was 26 weeks. It was generally accepted that six months was a relatively fair and
reasonable period for a employer to assess the suitability of a worker before deciding whether to accept him as a
permanent employee. It was accepted that 26 weeks allowed the employer properly to arrive at a conclusion on the suitability or otherwise of his employee. The 26-weeks provision had nothing to do with sacking someone unfairly.
The Tory party bitterly opposed the 26-week provision and one of their first acts after taking office was to extend the qualifying period to 52 weeks. That was done in July, 1979. Two arguments were advanced to support that extension. The first argument was advanced tentatively and without conviction and the Minister adopted the same style this evening. It was said that 26 weeks was not long enough to assess a new employee's suitability and so the qualifying period was extended to a year and then to two years. A brand new aeroplane could be tested in a shorter time than that.
The second argument was advanced with considerable force and much more certitude. It was contended that the extension of the qualifying period would create more jobs. The then Under-Secretary of State for Employment, who is now the Solicitor-General, informed the House on 24 July 1979 that the Government's
decision to lay the order again derives from our determination to see that the creation of new jobs is not curtailed by legislation that is unreasonable and unnecessary in its effect.
Later he said:
To anybody with ears to hear or eyes to read, it must be plain that the qualifying provisions are widely seen as discouraging employers from creating new jobs.
That view was reiterated later in the debate by the then Secretary of State for Employment, the right hon. Member for Waveney (Mr. Prior). He said:
However, we have to restore the confidence of management and small employers to take on labour and to be able to cany out their duties properly."—[Official Report, 24 July 1979; Vol. 971, c. 527–56.]
At that time unemployment stood at 1–4 million. That was before the Tory Government started to massage the unemployment statistics. What has happened since then? How many jobs were created by extending the qualifying period from 26 to 52 weeks? What reduction in unemployment has taken place between July 1979 and today? Everyone knows the unfortunate answers to those questions. Far from the Government creating jobs, they have destroyed them on a colossal scale. If the method of recording unemployment statistics were the same now as in 1979, there would be almost 4 million officially recorded as being out of work.
The Minister has not offered any evidence—if he had allowed me to intervene, I would have asked him to support his claims with concrete evidence—to support his claim that the order will create more jobs, because there is no such evidence available to him. However, there is considerable evidence that thousands of workers will suffer as a result of the order. Millions of workers, including part-time women workers and workers in small


firms, are already disbarred from challenging the unfairness of their dismissal by the Government's previous acts.
It should be noted that at present about one quarter of all males and one third of all adult females in full-time employment have less than two years' service with their current employer. Those numbers are fairly constant and have remained constant for a number of years. Therefore, it will be those people who will be affected by the order. If they are added to workers in small firms and those in part-time employment, one sees that about half the labour force of Britain will be debarred from complaining to a tribunal if they believe that they have been unfairly dismissed. This is modern, Tory Britain.
If one looks at another ministerial justification for the change, one sees the peculiar statement of the Secretary of State for Employment when he announced the details in a Department of Employment press notice of 19 March 1985 which said:
The risk of unjustified involvement with tribunals in unfair dismissal cases and the costs of such involvement are often cited as deterring employers from giving more people jobs. This change․should help reduce the reluctance of employers to take on more people, while still preserving a fair balance between the reasonable 'interests of employer and employee.
The Secretary of State did not explain what he meant by the curious phrase "unjustified involvement". The existing procedures are designed to minimise unjustified cases through the process of initial conciliation by the Advisory Conciliation and Arbitration Service and pre-hearing assessments in cases where an employer believes a complaint to be spurious. Employees who bring complaints that are judged to be vexatious, frivolous or otherwise unreasonable — a very wide, catch-all description—are required to pay any costs incurred by the employer. No legal aid is available to help tribunal applicants to bring cases. The image given by the employers of "unjustified involvement" is a complete red herring. Fewer and fewer cases of unfair dismissal are being heard before tribunals. Tribunal applications regarding unfair dismissal were just over 30,000 in 1983 — 25 per cent. down on 1979. These applications represent only a fraction—about 12.5 per cent.—of all the dismissals that took place in 1983. Only one third of those cases—

Mr. Richard Holt: The hon. Gentleman has just given some statistics which are at variance with those that I have received from the Minister. I am wondering whether the hon. Gentleman wishes to correct the figures that he has given. The applications registered in 1979 were 41,244, of which 16,180 cases were heard. There were 39,959 applications in 1983, of which 16,649 were heard. According to the official statistics, therefore, the 25 per cent. figure is completely inaccurate.

Mr. Evans: I have long since given up believing in the statistics issued by the Tory Department of Employment, for a very good reason. If we were able to make comparisons—obviously they cannot be made across the Dispatch Box—I suspect that there would not be a very great deal of difference between my figures and those that the hon. Member for Langbaurgh (Mr. Holt) has just read out. It will be interesting to see what figures are provided by the Minister.
Only one third of these cases—just over 10,000—proceeded to a hearing before a tribunal. The remainder were either settled before the hearing or were withdrawn. Of those cases heard by a tribunal, fewer than one third resulted in an award in favour of the employee—just one in 10 of all the original applications. When a tribunal ordered an employer to give an employee his job back —which ought to be a major criterion—in only about 100 cases did that happen. Only about three complainants out of every 1,000 got back their jobs.
The suggestion that unfair dismissal procedures inhibit employers from taking on labour has more to do with Thatcherite mythology than hard facts. To prove the mythology, I shall quote from a leaked confidential memorandum submitted on 7 July 1981 to a Cabinet subcommittee by the former Secretary of State for Employment the right hon. Member for Waveney. It related to his comments on the demand that was being made for alterations to the employment protection legislation and stated:
In practice, employers are most concerned about the consequences of unfair dismissal. However, their fears should be put into perspective. Only about 7 per cent. of all dismissals lead to a complaint before an industrial tribunal․My conclusion therefore is that there is insufficient justification to amend the employment legislation further in favour of employers. Moreover, I believe that any attempt to do so would alienate large sections of the working population, trade unionists and others, and would there be politically damaging to the Government.
I wonder whether that was one of the reasons why the former Secretary of State for Employment was sacked.

Mr. William Cash: Does the hon. Gentleman agree that one or two of the statistics that he has given suggest that there are many cases where people have pursued unfair dismissal applications unreasonably, vexatiously or frivolously and that as a result unjustified time was spent by employers? The facts that he has given about the few cases which have been upheld by the courts demonstrate the point that I am making.

Mr. Evans: If the hon. Gentleman studies the facts a little more he will find that the case is weighted against the employee making the application. There are pre-hearings. The employer is frequently legally represented and the employee is often on his own. In some instances he may have a trade union representative with him. However, there are people who do not belong to trade unions and, unfortunately, they are frequently sacked by the employer without any thought. They have no trade unionist to take with them to a tribunal. Such people foolishly have often not bothered to join a union. They learn to their cost one of the values of being a trade union member.
It is a pity that the Secretary of State for Employment lacks the political sensitivity that was shown by the right hon. Member for Waveney. He is oversensitive tonight, because he is not here. If he had showed some of that sensitivity, the Tories might not have needed a new team of centre forwards to which I presume the Under-Secretary would belong if he did not now sit on the Front Bench.
The Labour Government introduced the employment protection legislation. I am proud of the fact that I served on the Committees of the Bills that were introduced by my right hon. Friend the Member for Blaenau Gwent (Mr. Foot), not to stop dismissals or prevent employers from managing their businesses, but to create a better framework of industrial relations in which proper selection


and disciplinary procedures were agreed by both sides of industry. Most employers recognised that that led to better management practices.
One of the first things that the next Labour Government will do will be to introduce new employment protection legislation. The proof that our legislation was no disincentive to the creation of jobs is shown by the fact that when the Labour Government left office 315,000 more people were in work than when they took office.
Since then, for every job that Labour created, the Conservatives have destroyed six. Labour legislation helped to create jobs. Tory legislation has destroyed them. In their desperate search for scapegoats to blame for the appalling level of unemployment, the Government have come up with a brand new one: employers can be persuaded to employ more people only if they are first free to sack them. That is insulting to employers and the order is an affront to the British work force. That is why we shall vote against it tonight.

Mr. Spencer Batiste: The order adjusts the balance of protection given by unfair dismissal legislation originating under the Industrial Relations Act 1971, which was a Conservative piece of legislation. My hon. Friends and I take pride in the fact that good legislation to promote good industrial relations is Conservative legislation. The hon. Member for St. Helens, North (Mr. Evans) seemed completely to overlook that in the thrust of his argument.
The order is part of a sequence of adjustments that have occurred over the years to put right many of the deficiencies that have crept into the legislation as a result of the changes which the Labour party, when in power, introduced into the original Act. The absurd overstatement of the hon. Member for St. Helens, North did nothing to earn him any credibility, though it may have gone some way to earn him an Oscar nomination.
The focus of the 1971 legislation was job protection. The focus today in legislation concerned with industrial relations must be job creation, and the two can be, have been and are now in conflict. Hence, the need to address the balance of the legislation in the light of today's changing priorities.

Mr. Evans: What evidence does the hon. Gentleman have for saying that?

Mr. Batiste: I shall come to the evidence shortly.
Some will argue that unfair dismissal legislation should be abolished altogether. I do not share that view. As a practising lawyer, I have for many years been involved in industrial tribunals as well as business, particularly small businesses. I readily recognise the importance of, and fundamental contribution that unfair dismissal legislation has given to, the improvement of the industrial relations climate.
Unfair dismissal legislation is essentially fair, and it has raised standards of management. But, apart from the question of fairness and raising management standards, it is fully justified in cost terms. In the 1960s, many strikes and industrial stoppages occurred as a result of dismissals. Since the legislation was introduced in the early 1970s, such industrial disruptions have become a rarity because most people accept that unfair dismissal legislation provides a reasonable alternative to taking industrial

action. My argument is that the Government should return to the judgments that they made and incorporated in the 1971 Act.

Mr. Stan Crowther: Does the hon. Gentleman, being a lawyer, agree that it is disgraceful that an employee claiming unfair dismissal and wishing to appear before a tribunal cannot even get legal aid, whereas the employer who is defending the case can offset his costs against tax and thus have part of his costs paid by the taxpayer?

Mr. Batiste: The original judgment of the Industrial Relations Act, which has been accepted by subsequent Labour and Conservative Governments, was that the industrial tribunal should be an informal forum. If we introduce legal aid and inevitable legal representations in all cases, the procedure will be slowed down and become much more complex. Far from providing a greater source of justice for the people to whom the hon. Gentleman refers, I believe that it would be more difficult through delay and complexity for them to achieve their objectives. I do not accept that legal aid is desirable at industrial tribunals. I believe that people with good cases can obtain legal representation if they require it. [Interruption.] With respect, the hon. Member for Rotherham (Mr. Crowther) has very little experience in this area. I have represented employees at tribunals on many occasions.

Mr. Greville Janner: The hon. Gentleman should not suggest that Labour Members do not have as much experience as he in this area of the law. Where does he imagine that an ordinary working person who is not a trade union member will find skilled legal representation in the complex and difficult cases which everyone should know are the bane of industrial tribunals?

Mr. Batiste: I accept the hon. and learned Gentleman's expertise and his many books on industrial relations, not to mention his lectures to other lawyers on how to conduct their affairs. If an individual seeks advice from a solicitor and is told that he has no claim of significance, but he then chooses to pursue the claim on his own, that is his right. The fact that he will almost inevitably lose is due not to lack of legal representation but to lack of merit in his claim. If the solicitor advises the individual that he has a claim, it is my experience that he will readily act for such an applicant before an industrial tribunal. I do not see the need for legal aid in those circumstances. On the contrary, I believe that legal, aid in tribunal cases would march us one step further down the American road towards an over-litigious society.

Dr. Norman A. Godman: Would not the informality of the proceedings be enhanced by the complete absence of lawyers?

Mr. Batiste: I would happily subscribe to that view. As a practising lawyer, I accept that it must be up to the individuals on both sides to decide whether they want legal representation, but I believe that in most cases it is right for the parties to represent themselves rather than to have legal representation. Among large companies, the increasing trend is for the personnel manager or one of the line managers to represent the company at the tribunal, just as on the other side it is most often the individual applicant, a friend or a trade union official. I believe that the Opposition are making a bogus point, because the tribunals were always intended to be informal. I do not


believe that there is any benefit for anyone in trying to make them more formal, complex and legalistic in their operation.
I believe that large companies have adjusted their procedures to the legislation and that it represents no serious disincentive to employment. So why is the order needed? There are two reasons. First, there must be a reasonable period for assessment. That was implicit in the speech of the hon. Member for St. Helens, North when he was asked why the Labour party accepted a period of six months. There is no difference in principle between six months and two years, only a difference in degree. If one accepts the basic principle that there must be a period of assessment, it is a matter of judgment how long that period should be.
The hon. Member argued that the Conservatives were breaking the consensus, but in fact the Labour Government broke the consensus because the original judgment under the 1971 Act was that the period of assessment should be two years. Indeed, the hon. Gentleman admitted that when the Labour Government reduced the period to one year and then to six months, it was in the teeth of the fiercest opposition from employers, who said that it was unreasonable and unworkable.

Mr. Evans: Will the hon. Gentleman acknowledge that when the 1971 legislation was before the House, the then Secretary of State for Employment, now Lord Carr, categorically stated that the Tory Government intended to reduce the period from two years? The two-year period was the inception period. I wish that I had brought the reference with me, so that the hon. Gentleman could look it up in Hansard.

Mr. Batiste: The 1971 Act represented a major change in the way in which this aspect of industrial relations had been handled. Until that time, the majority of the available protection related to redundancy payments. At the beginning in 1971 it was proper to form a conservative view of a reasonable assessment period. It was perfectly reasonable to examine that aspect from time to time to ascertain whether the original judgments were still correct. The Labour Government took the view that the period should be reduced. As a vice-chairman of the Small Business Bureau, I can say that that decision by the Labour Government to reduce the period of qualification has done grave damage to small businesses and to employment in them. [Interruption.] If an Opposition Member wants to intervene, I shall give way. Hon. Members do not need to shout from a sedentary position.

Mr. Robert C. Brown: The hon. Gentleman will be aware that every year many extremely important appointments are made in which probationary periods are laid down. Is he aware of any top post in industry where a probationary period of two years is laid down?

Mr. Batiste: I shall tell the hon. Gentleman why I think that a two-year period is important and in the interests of employers.

Mr. John Prescott: Answer the question.

Mr. Batiste: I shall explain why I think this is so. The probationary period and the period of protection for unfair

dismissal legislation cover two different situations because of the way in which they are viewed by employers. If we have a 12-month or six-month period of probation and a 12-month or six-month corresponding qualifying period for unfair dismissal legislation, two months or six weeks before the period expires, the employer would take a view of the individual and say, "If we are even in doubt about this man's fitness, we should get rid of him now." If we have a longer qualifying period, the probationary period would still remain at six months or 12 months, but—[Interruption.] In making such assertions, hon. Members show how remote they are from the realities of management.
The second reason why I support a two-year period is that it is anomalous to have differing qualifying periods for redundancy payments and unfair dismissal legislation. At the moment, a person can, after one year, bring a claim for unfair selection for redundancy, even if he is not entitled to a redundancy payment. This absurd anomaly must be corrected by bringing the two qualifying periods into line, as they were in the 1971 Act. I support the common two-year qualifying period and the original judgment of the 1971 Act.
Does the order go far enough? I have said that I do not support total abolition of the unfair dismissal legislation, but I accept the other judgment of the 1971 Act which exempted very small businesses from the legislation. Unfair dismissal legislation is a disincentive to very small businesses. I accept that the Government have done a great deal.

Mr. Evans: They have done a great deal of damage.

Mr. Batiste: The hon. Gentleman keeps intervening from a sedentary position, but noise is no substitute for argument in this important matter.
The unfair dismissal legislation is a disincentive to very small businesses. I accept that the Government have done a great deal in the detail of the legislation to redress the imbalances which were injected into the legislation by the Labour party when it was in power. However much this Government seek to redress the imbalances in the legislation, two major disincentives to small businesses will inevitably remain. The first is that a one, two or three-man business simply cannot afford the time to fight a case before an industrial tribunal. The cost is wholly disproportionate in terms of business endeavour. However the balances or the burdens of proof are adjusted, that remains the position.
Secondly, a very small business is disproportionately at risk in relation to the cost of losing a claim before an industrial tribunal. A man can be dismissed from a business employing two or three people, he can then win a big award at an industrial tribunal, even though he may have contributed to his dismissal by his own conduct, and, as a result of that award, the whole business may go into bankruptcy, so that other employees lose their livelihoods as a consequence.
If the balance had been left as it stood in the 1971 legislation, it would be a much more realistic, sensible and practical piece of legislation. If every small business took on just one more employee, the unemployment problem would disappear. Given the overwhelming priority of job creation, the Government's duty is to remove the obstacles which stand in the way of that process.
I support the order, but I hope that the Government will soon go further and restore the 1971 position.

Mr. Greville Janner: Perhaps we can all at least agree that it is a great pity that a measure of this importance should be dealt with at this time of night and in the form of an order which we have no power to amend but can only accept or reject, and which does not go through the parliamentary process in its entirety. I hope we can agree that there are so many thousands of people who are affected and are likely to be affected that at least this is a matter which the House should consider at a time when it is awake and when it can consider fully all the matters concerned.
I suspect that the Minister was asleep when he talked, otherwise he would not have had to read his speech at such speed. One is reminded of the Member of the other place who dreamt that he was speaking in the other place and woke up to find that he was. In this place the Minister went through his speech with such speed that we listened to it with some amazement, waiting for a break when he would give way or perhaps add a dash of knowledge or an occasional statistic, or give the odd indication of evidence in support of what he was saying. But by the time we thought he might be reaching that break, he sat down, to cheers from his own side and gasps of amazement from those of us who thought that this measure, which is so important for so many people, would at least be given the courtesy of a full explanation by the Minister who was introducing it.
Perhaps the hon. Gentleman worked on the basis that the least said the soonest ended, and the quicker he could return to yawning on the Front Bench in his charming way. [HON. MEMBERS: "Come on."] I will not "come on" because this is a matter which should be dealt with properly and has not been. It has been treated in a disgracefully cavalier fashion. We have not even been told by the Minister how many cases he believes will not reach tribunals which otherwise would have done. That is the most basic statistic, and until now even his party has given it when introducing this sort of measure.
The statutory trial period, as it is known, should be at the very most six months. I take the point that was made as to why the Labour party, when in office, saw fit to have any statutory trial period. I have always considered that it was wrong. Indeed, I asked Mrs. Castle, who was the Minister at the time, why she would not get rid of the trial period. She replied with one of the more exciting sentences in my recollection. She said, "It would be the end of hop-pickers, my dear". Apparently no one would take on hop-pickers if there were any worry about their being dismissed unfairly, and hop-pickers in Kent would be replaced by machinery. I never felt that that was the best argument that we managed to produce.
But at least to our credit we reduced the period from two years to 12 months and from 12 months to six months. If the hon. Member for Elmet (Mr. Batiste) cannot see the difference between two years and six months, he is well qualified to have made the speech that he made. As it is, we have a statutory two-year trial period during which a person can be dismissed, with or without good reason, fairly or unfairly. That is a major scandal. Like my hon. Friends, I believe that an employee who has been dismissed should always be entitled to say to a tribunal, "It was not fair. I have been deprived of my livelihood. This is how I support my family. I will be on the dole. I will be the scrap heap."
The hon. Gentleman is wrong to say that redundancy rights should be subject to the same time limits as every other remedy. Why should not a person who has been dumped on the scrap heap after a year say, "it is unfair to have treated me like this. I want compensation." Why should it be right for a small business to treat people unfairly any more than it is for a big business?
To give the right hon. Member the Secretary of State for Trade and Industry his due, there was a suggestion from the Select Committee on Employment, on which I sit—a suggestion made so as to achieve unanimity—that when the code of the Commission for Racial Equality came into force and introduced the idea of ethnic monitoring and positive action, that Code should not apply to small businesses. The right hon. Gentleman said no, because there was no reason why a small business should be any more entitled to discriminate unlawfully than a big business. If that is right for discrimination, why should it be wrong when treating people unfairly? Why should a small employer be entitled to treat people unfairly when a large employer is not?
Why should there be merit in an argument that a small employer will be driven to the wall if he has to go to a tribunal? A lawyer on the Government Benches has seen fit to argue that, without producing one example to hack it. There is a good reason why the hon. Gentleman did not produce one case—there is none. In the history of the law there has, so far as I can recall, never been a reported case of a company going into liquidation because it had to meet an unfair dismissal claim—either won or lost.

Mr. Andrew Rowe: If the hon. and learned Gentleman is saying that he can see no difference between a company that employs one or two people and a company that employs a specialist personnel department, he is well qualified to be making the speech that he is.

Mr. Janner: I can see no difference in unfairness or discrimination between a one-man firm and a dozen-man firm. I can see no reason why a small employer should be allowed to break the law any more than a large one. If a small employer is guilty of fraud, he goes to prison, as would a large employer. It is no good him saying, "I am only a small employer, so I am entitled to cheat the tax man or the customer." Why should the small employer be allowed to cheat his employee out of his job any more than a large employer? It is that person's job; it is his livelihood.
The Minister said that the order is necessary to enable employers to employ more people. That might have some truth in it if the present system adequately protected employees. Unfortunately, it does not. The 70 to 73 per cent. failure rate, which has been fairly constant, is not because 70 to 73 per cent. of claims are not worth bringing. Some may be poor claims. But in the main, it is because th average employee cannot produce evidence. He does not have documents, although his employer has them. Above all, he cannot bring anyone to give evidence for him because his colleagues dare not go to the tribunal and risk their jobs, their livelihoods and their families by giving evidence against their employers.
I always advise employees to take good care of themselves, not so much because they must win tribunal cases, but because, if they bring a case, they will almost certainly lose it. Even more important, most people, especially managers and higher level employees, dare not


exercise their rights, because an application to an industrial tribunal is a passport to permanent unemployment. Therefore, there is not only a 70 per cent. failure rate of those who go to tribunals but a huge percentage of people who are unable to go to tribunals because they know that if they do they will never get another job.

Mr. Douglas Hogg: Does the hon. and learned Gentleman accept that in the experience of most of those who practise before the industrial tribunals the great majority of applicants who obtain compensation have already obtained employment by the time that the case is heard?

Mr. Janner: There are some, but I am told by personnel managers and employers who have large numbers of people applying for jobs that when someone in the queue for a job gets an interview and gives references and the references from the previous employer are taken up, and when the previous employer says, "He is suing us in an industrial tribunal", the applicant is unlikely to go to the front of the queue, on the ground that he is a person of initiative. In some cases, such an applicant gets the job anyway, but it is a great disincentive. If the hon. Member for Grantham (Mr. Hogg) does not know that, perhaps he should listen to some of those who are unrepresented and they would tell him.
That brings us to the next point, the representation. I agree that the more informal these procedures are, the better. I have never believed that this should be a happy hunting ground for lawyers. But, unfortunately, a tremendous amount of tribunal law has accredited over the course of years. This is no longer a question of somebody giving judgment under a coconut palm on the basis of what he hears. There is a vast amount of case law in which both the hon. Member for Grantham and the hon. Member for Elmet are expert, and which they can go to their law books to find.
What happens in tribunals is that the chairman or chairwoman tries very hard, if he or she is good—and many of the women are first class — to help the applicant in person, but it is not easy. If one talks to them and listens to them, they will say that people who have complex cases involving difficult questions of law are certainly better off to have legal representation.
I do not put the blame entirely on this Government. Again, I turned to our own Labour Government when we were in power because I have always believed that we should have brought in legal aid in industrial tribunals when we had the chance. I should also point out that it was not altogether the fault of the then Labour Government. The trade unions did not want it, and when they were faced by people like me who said to them, "Why not?", their answer was, "Bloody lawyer, feathering your own nest." When I said to them, "If a doctor asks for more medical help, you do not say, 'Bloody quack, feathering your own nest—, they said, "Ah, but that's different." I suggested to them, which I could do because I do not practise in industrial tribunals, that it is wrong to deprive members and non-members alike of the right to go to tribunals—and, by the way, the right to bring all claims concerning contracts of employment to tribunals and not to have to go to courts with one lot and tribunals with another, which is another idiocy—their answer was that it should all be dealt with on the shop floor which, in theory, is absolutely

right. But, in practice, the person who goes to a tribunal unrepresented is now, and will remain, often at a great disadvantage.
It is all very well for the hon. Member for Elmet to say that people should not be represented, but the fact is that a substantial company is generally represented either by a lawyer or by an articulate personnel executive, probably one who has been trained to do the job, whereas the employee goes on his or her own or through a friend and cannot get legal representation. They can get legal advice under the legal aid and advice legislation on how to bring the claim, and as to whether it is worth bringing, but they have to represent themselves.
Most people are afraid of tribunals and courts. Most people are apprehensive when they get there. They do not like it. It is not their livelihood, and they are scared. So there is already the disincentive to go, and there is already the qualifying period, which is much too long. It is a period that is about to be doubled. There is no justification for that. Neither is there, nor has there been given to the House, a shred of evidence that to do so will create one single job in any part of the country. It is a discourtesy to the House to claim to protect employees by doubling the qualifying period without giving the evidence. There is only one reason for that being claimed by a Minister who is articulate. It is that there is no evidence.
The Minister is a nice man. If he had evidence, he would give it to us. He does not provide that evidence because there is no evidence. He keeps his speech short because if he went further he would sink himself in the mire. Not only is the Minister a nice man, but he is also shrewd. He knows that he must skirt around the mire as quickly as possible and then run like hell. That is exactly what he has done.
There is no evidence that further jobs will be created. There is no evidence that businesses have suffered because of the one-year period. There is no evidence that the new qualifying period will help employment in any way and and no evidence that it will reduce cases which are allegedly vexatious, frivolous or unreasonable. There is no evidence that people go to tribunals for fun. There is no evidence that the present 12-month qualifying period discourages firms from taking on people. There is no evidence, no case, no sense—only a very bad rotten piece of legislation that I hope even Conservative Members will throw out.

Mr. Richard Holt: I should declare an interest because, although I am not a lawyer, I attend tribunals and represent people. Perhaps in my contribution I shall talk myself out of a job.
I shall describe the ways in which industrial tribunals have affected me. I was director of personnel, and the shop stewards' works committee told me that an employee was behaving in a peculiar way. We investigated the matter with the line manager and found that the employee was putting himself and other employees at risk and was liable to hurt himself and them.
After consultation we agreed that the employee should be dismissed. He went to the labour exchange to sign on and the first question that he was asked was 'Why are you out of work?" He said "I have just been dismissed." He was then asked whether he had commenced proceedings for unfair dismissal.
The chap was bemused at the time, signed a paper and proceedings were commenced against the company. In due course I and four or five colleagues, the convener and shop steward arrived at the place appointed for the hearing at nine o'clock in the morning and waited and waited. At the end of the day we were told that the man had not turned up. The chairman would not hear the case in his absence because he might have missed a bus or misread the date.
We all missed a day at work and had to work overtime to catch up and we were summoned to turn up at the tribunal four weeks later. The applicant did not turn up again and the chairman decided to allow the case to be heard. The convener of shop stewards said that the man was a herion addict and did not turn up for work regularly. That case cost the company many hundreds of pounds and it is not untypical. It is not the only case of which I have had personal experience.

Dr. Godman: I find the hon. Gentleman's anecdote of some interest. I have a couple of questions, one of which I shall ask now. I shall ask the other later if I catch your eye, Mr. Deputy Speaker. Why did that decision, if it was reached in such a fair manner, need to be defended by five managers?

Mr. Holt: Because, like so many employers, we were unsure of the case that would be presented by the man when he turned up. No one knows what sort of lies will be told by the applicant. Therefore, it was necessary to have everyone there to give evidence.
I am speaking primarily because I do not believe for one moment that the order will produce one single job. The introduction of the order goes nowhere in the direction that it should so that we shall have more jobs and so that employers will be freed from the shackles and worries of the industrial tribunal. My hon. Friend the Under-Secretary suggested that the change to two years is reasonable. I suggest that it is unreasonable because any employer should be able to assess whether a person is good enough in a very short time and not have to wait two, three or four years. Therefore, as far as I am concerned, this whole thing is rather specious.
It has been suggested that the Government do not have any figures for the likely number of people who will be affected by the introduction of the order. I have the official figures in a Department of Employment reply to a question that I asked, which states:
This information is not available in the form requested. On the basis of a sample analysis of complaints of unfair dismissal for the calendar year 1983 it is estimated that 1,650 such complaints heard by an industrial tribunal involved persons who had been employed for more than one but less than two years.
The figure should be treated with caution because of the margin of error inherent in the sample."— [Official Report, 7 May 1985; Vol. 78, c. 361.]
If Ministers are to come along with legislation, and if they want support from Conservative Members as much as from Opposition Members, they have a duty and responsibility to present a case that is cogent and has statistical evidence to back it up. If the whole edifice is based on the probability of 1,650 cases as a sample analysis, albeit allowing for the errors that might accrue, I do not believe that it is worth keeping the House up until this time of night.
The case for small firms is another one of those "Spit in the wind and see that it doesn't hit you when it comes back," scenarios. Who picked on 20 people? Why not 25? Why not 50? Why not 100? How many employers will sit

down, scratch their heads and say, "My God, I had better not take on another guy. That would mean I had 21 employees, which would put me within the scope of the Act."? In real life, that is not the way in which firms, personnel people and line managers deal with things. They say to themselves, "Have I got a vacancy? Do I need to employ somebody? Do I have the capability to offer a job to somebody? If I have, I shall offer someone a job, and I shall select the right person in the first place." In respect of small or large firms, no case has been made out for a period of one or two years, and the onus placed on the Government has not been discharged satisfactorily.
Small firms may have large turnovers. Alternatively, they may employ a large number of people — for example, on a vegetable stall—but their turnover may not be very great. However, all firms will be subjected to the majesty and panoply of the law.
I can tell the hon. and learned Member for Leicester, West (Mr. Janner) that even a humble personnel director would quake at the thought of going before one of these tribunals, because one does not know what it will do. Not only is the job of the employee on the line, but so is the job of the personnel director. If he fails with too many cases, he is liable to find himself out of work. Therefore, everyone walks into these tribunals in fear and trepidation.

Mr. Douglas Hogg: rose —

Mr. Holt: I am not giving way. According to the Parliamentary Under-Secretary of State's predecessor, the purpose behind the legislation was to provide a cheap, speedy and informal means of redress. Cheap? My fees are not cheap, so it will not be cheap to employ a lawyer. I can assure the House that my fees are only a fraction of those of the hon. and learned Member for Leicester, West.
Speedy? No figures are available as to the average length of time between a case being initiated and heard, but in those cases where there is a hearing, the median length of 13½ weeks has been estimated. In other words, the poor, cringing soul who has been fired, the poor, terrified personnel director, the foreman who did the firing and everyone else involved must wait 13½ weeks. More importantly, because of the way in which compensation is awarded, the employee will not take a job during that time because he will get more money if he is out of work. Therefore, the argument that people have gone into work is quite specious.
There are too many regulations. The hon. and learned Member for Leicester, West said that the situation had become too complex, too complicated and too difficult. He is absolutely right. Rather than lengthening the time from one year to two years, the Government ought to have a total review of tribunals and their procedures. They should ban all the lawyers from participating and should limit the hearing to the appellant, the respondent and the respondent's employer.
The hon. and learned Member for Leicester, West talked about deprived livelihoods. There is nothing more galling for a company than to train a person for a job only for that person to say after a year or 18 months, "Here is my week's notice. I am going off to work for your competitor." At present, the employer has no means of redress.
It is suggested that in unfair dismissal cases we can, with our hands on our hearts, look to the costs for frivolous or similar actions brought by employees. We are told that


the comprehensive statistics regarding costs are not collected and that the Ministry does not know. But we do know.
In 1982 costs were awarded against applicants in about 150 cases out of approximately 15,000. What sort of money does an employer get? He gets an average of £55. The range is £5 to £400. Why do so many people telephone me to ask what it will cost them if they dismiss someone? I say, "£300 for my services and probably £200 if you sweat it out and get the tribunal to make an award." So the case does not go to a tribunal. The whole thing is swept under the carpet. The person goes away with £200 or £300 and does not have the stigma on his record of having gone to a tribunal.
The whole business of the tribunal has become too complex, too costly and too legal. If you do not believe me, go there. When you go in, you have to sit on one side, with the other party on the other. There is the witness box —"How do you swear?", "Don't intervene," "Shut up." It is like the High Court. There is not a free and open exchange of information between two people so that the tribunal can determine in the final analysis whether in its opinion someone has been dismissed unfairly. What the tribunal has to decide is whether in its opinion the law has been interpreted correctly according to the advice given by the legal clerk. It has nothing to do with the realities of working in a factory, in an office, on a farm or wherever. Reality does not come into it. Industrial tribunals have become another arm of the law, just like any of the others that we watch in "Bleak House" from time to time.
My hon. Friend the Member for Elmet (Mr. Batiste) talked about cutting down the number of strikes. The speech of the hon. Member for St. Helens, North (Mr. Evans) on behalf of the Opposition was a travesty. I thought that tonight he might make a decent speech. Unfortunately, Opposition Members have not brought forward evidence to back up what they have been saying. I agree that it is difficult to prove that there has not been a strike for certain reasons. You would have to put into the ingredients the whole changing environment about going on strike. People are much more reluctant to go on strike than they used to be. Therefore, it is not reasonable to suggest with any degree of certainty that the number of strikes has gone down because of what has happened.

Mr. Evans: I never mentioned strikes.

Mr. Holt: My hon. Friend the Member for Elmet mentioned strikes. If you want to intervene, I will sit down.

Mr. Evans: No, carry on.

Mr. John Golding: Is the hon. Gentleman aware that the percentage of strikes due to disciplinary causes dropped when the period was changed from 52 weeks to 26 weeks and then rose again when the period was extended? That evidence is on the record. I will quote the figures later if I am called.

Mr. Holt: I do not dispute that. Neither the hon. Gentleman nor I can prove or disprove negatives. Without a complete analysis of every case so as to reach conclusions, you are generalising—

Mr. Deputy Speaker (Mr. Harold Walker): Order. The hon. Gentleman should not keep bringing me into these matters. I am not generalising at all.

Mr. Holt: I would not wish to bring you, Mr. Deputy Speaker, into something so uncontroversial as the order before us.
My hon. Friend the Minister might have brought along a welter of evidence to justify making the order. The prerequisite is that it will produce jobs. I shall judge whether the order will have that effect in my constituency, but I doubt whether it will produce many more jobs. I shall ask constituents whether they have been taken on as a result of the legislative changes that the Government have introduced.

Mr. Douglas Hogg: Will my hon. Friend ask employers in his constituency whether they found it more attractive to take on employees following the legislative changes?

Mr. Holt: I do not accept that it is more attractive or that it will be. An employer will take on an employee if there is a vacancy, but he will not do so if there is a prospect of having to employ a barrister to defend the decision that he took in the prevailing circumstances.
I needed evidence before I could say that what the Government were doing was right. I do not believe that the Government's action is correct, but I take that view for reasons that are different from those of Opposition Members. The Government are not moving half far enough. They should be investigating the work of tribunals.
I thought that I would take the trouble, even if the Government would not, of acquainting myself with the views of relevant bodies. I telephoned the Institute of Personnel Management. Being a fellow of the institute, it cost me nothing to obtain the information. If the Government are short of a bob or two, I might give them a loan. The institute told me that it was still surveying the matter, but added that the order "would tidy up the present position". Does tidying up provide jobs? I suppose that the tidying-up exercise will make life easier for lawyers, but it will not make line managers, entrepreneurs or others in business any more inclined to take on employees or not to dismiss employees.
I contacted also the Engineering Employers' Federation. It said, "We welcome this but it should go further. It should be retrospective and for a longer period." It seems that the Government have not taken the federation along with them.
I spoke also to the British Institute of Management, of which I am also a fellow; therefore, I obtained free information. The institute has carried out a survey of its members to ascertain whether they feel that the order is right or wrong. The survey provided the crude statistical evidence that 65 per cent. are in favour of what the Government are doing, 32 per cent. are opposed and, typical of British management, 3 per cent. do not know what the answer is.
I said to myself, "All is not lost, there is always the CBI." Accordingly, I contacted the CBI.

Mr. Janner: Is the hon. Gentleman a member of the CBI?

Mr. Holt: No, I am not. I cannot afford that.


The CBI kindly provided me late this afternoon with a glossy book which I have with me. As the House will see, it still bears a compliments slip. I shall read the CBI's official position on this issue. A passage in the book reads:
Following the announcement in the Budget, the Secretary of State for Employment has laid a draft Order before Parliament to increase the qualifying period of service for complaints of unfair dismissal to two years for all employees. This change will come into force on 1 June. The effect on the number of tribunal cases will not be felt for some time, but even then it will not be enormous. The effect on companies, existing recruitment practices and disciplinary procedures is likely to be marginal.
Of course I support the Government's attempt to produce more jobs.

Mr. Golding: Is the hon. Member aware that it is common for the Confederation of British Industry to be sceptical about Government legislation? The confederation is as aware as are hon. Members that the Institute of Directors has more influence on this Government than practical industrialists. What is the view of the Institute of Directors?

Mr. Holt: I must confess that I do not move in such exalted circles. Therefore, I am unable or unwilling to tread in waters where I might get my feet a little wet.

Mr. Robert C. Brown: On a point of order, Mr. Deputy Speaker. When the Government bring an order before the House it is incumbent upon them to produce evidence to justify the carrying of such an order. The only support the Government have received in this debate has been from the hon. Member for Elmet (Mr. Batiste) who is a member of the legal profession and who therefore has a vested interest in this matter. The devastating case put forward by the hon. Member for Langbaurgh (Mr. Holt) suggests to me, Mr. Deputy Speaker, that you ought to adjourn the House for 10 minutes to provide the Minister with an opportunity to produce evidence or to withdraw this tatty little order.

Mr. Holt: I have, I hope, made it absolutely and abundantly clear, Mr. Deputy Speaker, that I am not opposed to the Government's intentions. I am opposed to their actions. They do not go far enough. This Act has been on the statute book since 1971. There has been no thorough review of the work of tribunals. They have become more and more legalistic and more and more costly. Tribunals now cost this country £20 million.

Mr. Cash: Could I please ask my hon. Friend, with whom I have the pleasure to share a room, and who frequently asks me for my opinion as a lawyer, which I am happy freely to give him at almost any time of the day or night, to tell me, because of the extreme attack that he has made on the legal profession this evening, how Acts of Parliament which come before tribunals would be interpreted if lawyers did not appear before them to provide help for those who need it in order that they may obtain justice before tribunals?

Mr. Holt: I was hoping not to have to introduce one little anecdote, but I am now being forced to do so. I must say to my room mate, if I may use that phrase, that when I set up in business as a consultant with some colleagues from personnel management we offered our services to small businesses and to others—we are not proud; we will take money from wherever it comes—and we took the step of advertising in the journal of the Conservative

Small Business Bureau. This was not an unreasonable thing to do. Within 24 hours I had a letter from the Law Society saying, "Lay off. This is something for the Law."

Mr. Cash: As the vice-chairman of the Conservative Small Business Bureau, may I say to my room mate that I should be glad to look into that matter, particularly as I happen also to be on one of the parliamentary committees of the Law Society. I shall take it up with both bodies.

Mr. Holt: I appreciate my room mate's offer. I shall take it up gladly and will be affected by it as much as I was affected by the letter from the Law Society. I continued to practise with my colleagues. We do a better job more cheaply than the lawyers, because it is based upon the real life experience of workers in factories. It is not based upon something that one has read about in books or seen inside a court of law or before tribunals.

Mr. Crowther: On a point of order, Mr. Deputy Speaker. Could not this private dispute between the hon. Members for Langbaurgh (Mr. Holt) and for Stafford (Mr. Cash) be carried out in the privacy of their room?

Mr. Holt: That is a practical proposition that my hon. Friend the Member for Stafford (Mr. Cash) and I should be delighted to take up. I did share a room with someone else, but we would not have been able to have any conversation because I could not get a word in edgeways.
During the course of my short, frequently interrupted, contribution I have sought to introduce a small element of levity because I often find that the ponderous goings on of lawyers drive most people to despair. That is one of the reasons why few cases go to tribunals. None of us wants to go to them, even if the money is good.
If my hon. Friends cannot occasionally stand a little tickling around the ribs, they are not men enough for the job. I know that my hon. Friend the Minister is man enough for the job and will take on board what I am saying. I am trying to make the serious point that the tribunals have become over-legislated. The order is meaningless. There should have been a proper review of tribunals and their procedures. I believe that that would be welcomed by both sides of industry and by all the elements of management to which I have referred. Although I have not tried to contact it, I dare say that the TUC would welcome it if tribunals were once again made simple, speedy and cheap.
If I may paraphrase, the order might be a small step for the Government, but I believe that it is a minuscule step towards helping the unemployed. The fanfare with which my right hon. Friend the Chancellor unveiled the proposal in his speech was a smoke screen. It will not create one job.
My job, as the Member of Parliament for a constituency which has the highest unemployment in mainland Great Britain, is to prod the Government into doing something which will help to produce jobs. The employers to whom I speak want the Government to wipe the legislation off the books, to stop tinkering with it, or at least to make it simpler, cheaper and speedier, so that, irrespective of whether the period is six months, one year or two years, the people who are most involved—those who have been fired and those who have done the firing—can go before a lay body as quickly as possible for it to adjudicate, like a jury, on whether the dismissal was fair or unfair.
In the last case with which I dealt there were 10 references to previous cases. We sat for hours going


through what people had said previously to different tribunals. Finally the managing director was asked the simple question, "Given all the facts, would you do the same again?" He replied, "Yes, I would fire him because he was no good." The tribunal found against the company. I accept the fact that the tribunal found against the company that I was representing, but the case had cost too much in time, research, and heartache.
The Government would be well advised to let the order go through, but to study properly the whole subject of tribunals.

Mr. David Penhaligon: Considering that the hon. Member for Langbaurgh (Mr. Holt) managed to spend 33 minutes talking about the order—and at the conclusion of his remarks I was not sure whether he was for or against it—I was surprised by his claim that he had managed to speed up the work of tribunals.
The hon. Gentleman, nevertheless, made some interesting points. I agree with him that the order will not make any difference to the nation's total unemployment statistics. Indeed, there cannot be many hon. Members who believe that it will have much effect on unemployment. Nor do I accept the claim of the hon. Member for St. Helens, North (Mr. Evans) that labour protection legislation increases jobs. It does not make much difference either way.
However, the justification for this kind of legislation is to inject into the labour market a degree of justice for the individual. When a person appears before a tribunal, local people—that person's friends and colleagues—have a view about whether the dismissal was justified, might have been justified or was completely unjustified. People have a corrosive feeling of anger when they believe that, say, Bill, who has given a substantial period of service to the company, has been dismissed for unjustifiable reasons. That is the real justification for legislation such as this. While no system can be perfect, it gives people an opportunity to have their cases heard and for some compensation to be offered if an outrage has been committed.
That is the justification for the legislation, but the order is a move in the wrong direction; and what saddens me is the feeling that the Minister agrees with me. He adduced no evidence for the order, just tittle-tattle about what might have been said over the bar in the Conservative club quite late at night.
Much the same level of argument is put to me by some of my local small employers about the abolition Of wages councils. They argue that if they could pay a little less, they would be more competitive and be able to offer more jobs. There is some truth in that, so long as it applies only to them and not to all their competitors who are beating them. If an employer is the only one to be allowed to lower wages, of course he can undercut his competitor down the road. But one presumes that if wages councils are abolished—hon. Members on the Opposition Benches, regardless of party, pray that they will be retained—they will be abolished universally. In other words, employers who argue that the abolition of wages councils will create more jobs are simply indulging in tittle-tattle.
The Minister argued that an employer needed a period in which to get to know the qualities of an employee.

There may be some truth in the argument that a person may join a company and work with enthusiasm and dedication for a time, and that that period should be long enough to enable the employer to judge that employee's behaviour, attitude and enthusiasm. That is an argument for having a period of some length. The Minister argued, however, that by increasing the period from one year to two years, that will significantly increase the understanding that an employer can have of an employee. Not many employers believe that, certainly not many employees believe that, and we on the Opposition Benches do not believe that. If an employer cannot decide in a whole year—in 52 weeks of 40 hours a week—whether Bill or Mary, or whoever, is satisfactory to be employed by that company, the idea that two years will be the right period is a fantasy, and the Minister knows it.
This is part of a steady erosion of rights. Far too many Conservative Members believe that the solution to the 3·5 million unemployment problem is to remove some of the minimal rights that exist. They believe in a peculiar fatalistic way that if they remove enough of those rights fast enough, suddenly employers will begin to employ more people. That, again, is not true.
As the hon. Member for Langbaurgh said, employers take on employees because they see an opportunity to use those people's skills to their own advantage. I do not complain about that. That is the way in which our economy has grown. The reason why there are now nearly 4 million unemployed is that the Government are running the economy in such a way that employers no longer see any way of using the skills available in a satisfactory and economic way.
People tend, sometimes without justification, to feel weak and vulnerable vis-a-vis their employers, and the Government have made them feel even more so. People's rights in relation to unfair dismissal are gradually being taken away. That is a bad thing and it is a sad day for Parliament — one of a series of days that the Government will come to regret.
This is a move in the wrong direction and, saddest of all, I suspect that the Conservative Member most convinced of that is the Minister who made the rather inadequate attempt to justify the measure when he opened the debate.

Mr. Douglas Hogg: Despite all the noise and excitement generated among the Opposition, we are actually discussing when a qualifying period should arise. That does not give rise to massive questions of principle, and in view of Labour Members' attitudes to this in the past they are not in a good position to argue about it as a matter of principle today.
The qualifying period of two years was first introduced in the 1971 Act. In 1974 the period was reduced to one year by the Labour Government and the following year it was reduced to six months. The concept of a qualifying period, however, has been preserved throughout. There is a similarity between the right not to be unfairly dismissed and the right not to be made redundant. For more than 20 years Parliament has accepted that there should be a qualifying period before a person becomes entitled to redundancy payment. That goes right back to 1960. The qualifying period is two years and the Labour party has always accepted that.
I do not find that fact at all remarkable, because the right not to be unfairly dismissed is a very valuable one, giving rise to a large number of fairly substantial financial benefits. The benefits may well be quite correct, but the House must always consider whether such rights should arise immediately upon the formation of a contract of employment and by virtue of that fact alone. I do not agree that they should.
The hon. Member for Truro (Mr. Penhaligon) referred at some length to probationary periods, but that is not really the purpose of the qualifying period. In my view, the reason for the qualifying period is that people should have to justify their entitlement to this fairly valuable right. Whether the period of justification should be six months, 12 months or two years is not a matter of principle but a rather nice difference of judgment as to how the balance should be weighted.
I think that most Members now agree that the containment of unemployment is the strategic purpose of Government and Parliament at this time and every benefit and policy that we bring forward must be tested against that objective. When this measure is tested against that yardstick one sees the advantages that are likely to accrue.
My hon. Friends have referred to the disadvantages faced by small employers in this context. I appear frequently in cases involving these matters. Last month, I was involved in a case concerning a small employer whose entire work force of six would have had to attend the tribunal for two days. An employee had resigned. The employer was seeking to argue that the resignation constituted a constructive dismissal. I took the view that he was wrong and had no chance, and advised the employer accordingly. the employer was faced with the fact that he would necessarily incur substantial costs and his entire work force would have to attend for two days. That was understandably unacceptable to him, and so a payment had to be made. A payment was made. This happens repeatedly.
Hon. Members ask, "Where is the evidence that any job will be created directly as a result of this change in the legislation?" I admit that I cannot come forward with direct evidence.

Mr. Prescott: Neither can the Government.

Mr. Hogg: But, in the end, one comes forward with the impression, which is made in good faith — [Interruption.] Hon. Members must try to approach these issues with open minds. They must try to be open-minded on questions of employment. Repeatedly, both professionally and in my political capacity, it has been made clear to me that the framework of the legislation makes small employers in particular less willing take on more employees.

Mr. Prescott: Where is the evidence?

Mr. Hogg: We come back again and again to the question of judgments made in good faith.

Mr. Janner: Without evidence.

Mr. Hogg: Of course it is based on evidence.

Mr. Janner: Where is it?

Mr. Hogg: I have told the hon. and learned Gentleman. If only he would listen, but he never does. I have told the House the evidence that I have been receiving.

Mr. Janner: Where is it?

Mr. Hogg: If the hon. and learned Gentleman would only shut up for one moment, he might hear it. I have repeatedly been told by employers, in my political and legal capacities—

Mr. Janner: Hearsay.

Mr. Hogg: The hon. and learned Gentleman knows all about hearsay, because he makes his living out of it. He would do well to listen just occasionally.

Mr. Janner: There is no need to be offensive about it.

Mr. Hogg: I would certainly not be offensive to the hon. and learned Gentleman, whom I rather like, but he would do well just to listen. One repeatedly hears people say, "I would take on more people if it were less unattractive for me to do so."

Mr. Evans: Anecdotes.

Mr. Hogg: They may be, but they may reveal the facts. We must try to reduce people's anxieties about the existing law. This measure is a legitimate step in that direction. I hope that, as a consequence, and judged against a yardstick of improving jobs, the House will support the order.

Mr. Stan Crowther: Unlike a number of hon. Members who have spoken tonight, I intend to make a short contribution. The hon. Member for Grantham (Mr. Hogg) referred to small firms. That matter is not strictly relevant to the order. Apparently, the order wipes out the difference between those employed by small firms and those employed by larger firms and subjects them all to the same injustice. I have never understood why people employed by a company with 20 employees should be denied rights that apply to people employed by a company with 21 employees. Apparently, the order applies the same injustice to everybody, so that seems to wipe out the difference.
The hon. Member for Truro (Mr. Penhaligon) raised an interesting, but totally irrelevant, point. He talked of his belief, which I share, that an employer who has been employing someone for 12 months should by then know whether that person is suitable for the job. That is true, but it is totally irrelevant, because we are not talking about whether people are suitable for a job. If they are sacked because they are not doing the job properly, that is fair. Here we are talking about unfair dismissal. I do not understand why it is all right for people to be unfairly sacked at a certain period but not right for them to be unfairly sacked at a later period. It is wrong for people to be unfairly sacked at any time. If they have been working somewhere for only one day, they should not be unfairly dismissed. That is the real issue here.
I accept the point, rightly made by the hon. Member for Grantham, that my party has in the past accepted a qualifying period. I think we were wrong to do that. Justice demands that people should be compensated or reinstated if they are unfairly dismissed, irrespective of how long they have been employed. If they are incompetent or dishonest, they should be sacked without compensation, but if the dismissal is unfair the qualifying period is totally irrelevant.

Mr. Ernie Roberts: I speak not as a lawyer but as someone who


has been a shop steward for 25 years, and as a national trade union official with some experience of dismissals and protection against dismissals.
The order will remove the right of a worker to go before a tribunal and appeal against unfair dismissal if he has been employed for less than two years. There are nearly 4 million people in Britain who have been unfairly dismissed. It is not their responsibilty that they have been dismissed. They have not been dismissed for any reason for which they have been responsible. It is the responsibility of the Government.
I am opposed to the order being sneaked in at this late hour because it cannot stand the light of day. The order is absolutely irrelevant to job creation. Its aim is to make sacking easier and cheaper. I agree with my hon. Friend the Member for Rotherham (Mr. Crowther) that, in spite of what has been said from the Conservative Benches, there should be no qualifying period.
I know from my experience that shop stewards, workers and trade union representatives generally are always under the threat of victimisation by their employers. It happens continually. There was far better protection under the essential works order. It often protected me when I was at work. It operated at a time when the country needed the workers' labour and was prepared to give them protection in their jobs.
The extension of the order to two years will hit particularly school leavers and those who are at present unemployed. They will be under constant threat of dismissal if, on getting a job, they do not work for the pay set down by employers and at the speed and under the conditions demanded by them. That is what the order is about. It is a weapon to be used for that purpose. The threat of the sack is the big stick that the employers will use against workers, and they will have two years' free bashing of work people to make them do what the employers want them to do.
Directors and top management — there are some representatives here—are well protected against unfair dismissal. They are protected by contracts with companies which provide massive golden handshakes. Those who own and control the means of production, distribution and exchange will use their power to hire and fire as they please. Their only concern will always be to make as much profit as they can and to squeeze as much work as they can from people they employ.
It would be far better if this Government introduced an order on the right to work rather than one on the, right to sack. They should pay more attention to that. The Government and the employers know that the order will produce more strikes because that will be the only method for workers to obtain justice because they cannot take their case to a tribunal until two years has elapsed. Their only defence of their jobs will be to strike. The order will provoke more industrial unrest.

Mr. John Golding: One thing we know clearly — that the directors of this country have voted substantial sums of money, millions of pounds, to the Conservative party. That is the argument for the order. My hon. Friends have said that the

Government have produced no argument for the order —
they do not need to do so because they have received payment for this order.
I do not know whether the Government are introducing the order because it will please the Institute of Directors, or whether it is because the Institute of Directors has twisted their arm. The order is ideological. It is not even seen to be in the interests of those managers in industry who actually manage. The hon. Member for Langbaurgh (Mr. Holt) gave the game away when he read from the CBI brief. The practical managers, who often find themselves at loggerheads with the directors, are saying that the effect of this order on employment will be marginal. So why has it been introduced? It is because the Government think that they must pay the debt that they incurred to the directors before the general election. They are paying with our time for the money that they received to help them win the general election.
The paucity of the Minister's speech has been mentioned already. Have we ever known a debate with so much criticism of the Minister, but not one note of reply being sent from the officials' Box through the PPS to the Minister? Not one item of refutation has been passed. The PPS tonight has been one of the idle layabouts on the Government Benches. It has been a remarkable debate. The Minister has not made a case and the officials have not been able to think of one refutation of the arguments presented.

Mr. Cash: Will the hon. Gentleman be good enough to explain how it was that in 1978, when the precursor to this order was going through the House and the Labour party was in Government, it allowed a private Member's Bill that contained the essence of this order to be passed against the then Government's Whip because Labour Members did not turn up to support their Government?

Mr. Golding: I do not think that that is relevant, for reasons that you and I know, Mr. Deputy Speaker. It may be embarrassing to Conservative Members because a very distinguished Member of the House was in charge of industrial relations legislation at the time. I know that there would be embarrassment if I referred to him.

Mr. Cash: I wish to complete the story by explaining that I have some knowledge of this because I drafted the Bill in question.

Mr. Golding: The only argument we have heard from Conservative Members who are lawyers — and I emphasise that we have heard no criticism from Conservative Members who are practising managers—is that these procedures are inconvenient and costly to the employers.
I do not know whether Conservative Members know how inconvenient and costly it is to be sacked. The right hon. Member for Cambridgeshire, South-East (Mr. Pym) has been unfairly dismissed, and has translated himself into centre forward. But, that apart, I do not think that Conservative Members know what it is like to go home to one's wife and family and explain that one has got the sack. It is more than an inconvenience. It is rather worse than having to sit two days in some ante-room waiting for a case to be heard. To have to go home and say, "I have had the sack. Look, it was unfair. Look, it was not my fault. I have suffered because of the arbitrary whim of some manager." It is not just inconvenient. It can be a disaster.
Talking in terms of cost, in the survey, unprompted, managers disclosed that the cost was about £4,000. But when they thought of what they were claiming on their tax forms, they increased that to £15,000. Let us say that the cost for the employer is between £4,000 and £15,000. That is minimal when one considers the employer's turnover compared with the loss of wages to an individual who is unfairly dismissed. To a company, the inconvenience and the cost of having to go a tribunal to justify an unfair dismissal is infinitesimal compared to the cost to the individual who has been sacked.

Mr. Janner: To reinforce what my hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding) says, is he aware that the average award to a person who is among the 30 per cent. who succeed is only about £850, which is far less than the amount that could be awarded, which is very seldom reached?

Mr. Golding: I am not as familiar with the facts as is my hon. and learned Friend, but I do know that the legislation has had many beneficial effects. First, as has been pointed out—and whether one can quantify it I do not know—it has provided an alternative to strike action on the shop floor. It has removed a lot of the frustration and grievance among people who sometimes do not feel strongly enough to strike. It has removed the demoralisation that is always present among groups when they think that they are subject to arbitrary power.
What Conservative Members do not understand in my view is that working people without vast savings and an accumulation of capital behind them are in a weak position when faced with such employers. If the employers can do without the individual employee, the individual employee cannot do without the wages. These individuals are weak. When these weak individuals face people who can take decisions on an arbitrary basis, they feel very humiliated when the decisions are taken on anything other than just grounds.
I do not say that all dismissal decisions are unfair—obviously not. But some are. Conservative Members will cite cases of irresponsibility on the part of the employees. Of course there will be some of those. Of course in the isolated case the employee will be irresponsible. However, many employers take decisions which are based not on reason but on whether they feel at home with the employee. Sometimes the employer will be upset by what is happening in his domestic life and will take odd decisions for odd reasons. When a decision is as important as a sacking it must be fair. There must be some resort to an outside body when a person believes that his dismissal is unfair.
Government Members argue that at a time of high unemployment it is more important to create jobs than to be fair. In a nutshell, that is their argument. The argument is not new. During the period of the Labour Government between 1976 and 1979 I spent a lot of time talking to employers throughout the country. Often I heard the argument that the employment protection legislation militated against employment. When I cross-examined the person arguing that point I was usually told "That does not apply to us, but we've heard that it applies to somebody else." Not one employer said "It affects me."
We introduced a number of studies because the Government were worried about the effect of what they had done. At that time 1.4 million people were

unemployed and we felt a deep sense of responsibility towards them. Those studies are often quoted. I refer to a paper by Daniel entitled "The effects of employment protection laws in manufacturing industry," published in the Employment Gazette, June 1978 and to a paper by Daniel and Stilgoe entitled "The impact of employment protection laws," published by the Policy Studies Institute in 1978. There is also a paper by Clifton and Tatton Browne entitled "The impact of employment legislation on small firms," published by the Department of Employment as research paper No. 6 of 1979.
I was responsible for those studies, which all came to the same conclusion. There was an impact, but it did not decide whether employers recruited. The biggest impact was on the care taken when recruiting. That is right. It is irresponsible for an employer to take on someone knowing that he might be sacked. A responsible employer knows what the job means and must ensure that the person recruited is suitable and that he fits in within the first few months.
To say that two years are needed before one can know whether a person is doing a job properly is poppycock. If it takes a person that long to decide, he is not doing his job properly and should be sacked. We are talking about manual workers, not sophisticated people. I believe that what the Government are doing is wrong.
I have talked about the inequality of the worker and the employer. It happens before the tribunal as well. The hon. Member for Langbaurgh almost brought tears to my eyes when he talked about how he, as a director of personnel, quaked before going into a court. But he went in with four other people. He was well briefed, with all the substantial resources of the firm behind him. He should think of the individual who has been sacked, who usually cannot take four or five people with him. Why? Because the others are frightened of victimisation. We in the Labour pan y know that that happens over and over again. If one asks, "Who will give evidence?", the first time Sarah, Jane, Bill and Joe say that they will. A week later they say that they are frightened to give evidence because the boss will victimise them.
My hon. Friends on the Front Bench are pleading with me to sit down. It is the story of my life, but I shall do so—only because it is a plea from my Front Bench. I believe this to be one of the most iniquitous things that the Government have done, because they do it without reason. They do it against workers everywhere. They do it to repay the debt of money given to the Conservative party before the last general election.

Mr. George Park: I had thought that following the speech by the hon. Member for Langbaurgh (Mr. Holt) the Minister would graciously withdraw the order and creep away quietly, instead of keeping us up after the midnight hour.
The point that the hon. Member for Langbaurgh made about the law getting mixed up in tribunals is something that I have fought against ever since its inception. We had a first-class example of what happens when the law gets mixed up in such matters when the hon. Member for Grantham (Mr. Hogg) got on his feet. Never in his life has he been sacked on the spot and had to go home to reveal the news to his family.
With the present level of unemployment, employers can be very choosey when engaging labour. Prospective


employees, for the same reason, are anxious to please prospective employers. Therefore, at present the scales are weighted heavily in favour of employers.
We were told by the Minister in his short speech that employers were afraid of going to tribunals. I believe that the fear is on the part of the employees, not the employers.
Last night, together with colleagues, I met a delegation of women clothing workers from the west midlands. Those who worked part-time were paid 50p an hour. I understand that the delegation was seen by a Conservative Member who is now in the Chamber. He may want to corroborate what I am saying. People in full-time employment were being paid about £1 an hour. The women found that their tax and holidays were being fiddled. They were in difficulty with the Department of Health and Social Security. Notwithstanding that, they were extremely chary of having their cases taken up, because, bad though they were, merely to reveal them would have meant the sack. Indeed, one woman, who had had the effrontery to organise her workmates into a trade union, was promptly sacked. In another case, the employer was so determined not to allow trade unionism into his factory that he shut it down and reopened a few months later in premises on the opposite side of the road.
Last night we listened to those women. I do not know whether the Conservative Member wants to corroborate what I have said. I shall give him the chance to do so, but I have not identified him because I do not wish to embarrass him unnecessarily.

Mr. John Mark Taylor: The hon. Member for Coventry, North-East (Mr. Park) has referred to a visit here yesterday by some immigrant workers who, in the main, are largely employed by immigrant employers. Many of their circumstances were most unsatisfactory, and what the hon. Gentleman has said is largely correct.

Mr. Park: Except that I did not mention immigrants. To me an employer is an employer. I am interested only in the circumstances. From what I heard last night, it was clear that fear existed among the employees. It did not exist among the employers, who seem to have the whip hand.
I agree with my hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding) that it stretches the bounds of credulity to suppose that, given the initial ability to be choosy, an employer should support the idea of requiring two years to assess whether an individual will fit into the set-up. I cannot believe that.
There has been no evidence to support the order. In fact, the hon. Member for Langbaurgh, figuratively speaking, stripped the Minister bare. The Parliamentary Under-Secretary has not responded at all, and that is a scandal. This is just another turn of the screw in relation to the policy announced by the Conservatives when they first came into office. They said that the balance of advantage was too much on the side of the trade unions and that they would do something about it. This order is part of that process.
The Government's purpose is to undermine the trade union movement and to remove the possibility that people can be treated fairly. As my hon. Friend the Member for St. Helens, North (Mr. Evans) said, the Minister must tell us why any employer should have the right unfairly to dismiss anyone at any time.

Dr. Norman A. Godman: I agree with much of what my hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding) said about the traumatic consequences of whimsical managerial decision making. The shock of being sacked and deprived of one's livelihood is dreadful.
I saw a lot of scandalously bad management among British trawler companies north and south of the border. Since the 1970s many of those companies have gone to the wall. That should not surprise anyone, because they were lousy managers of that most important and valuable resource — their employees. Their strategic decision making about the development of their companies in the changing international fishery regime was as bad. Many of them have disappeared from the scene. There are a couple of honourable exceptions in Aberdeen, but many employers in the British fishing industry are inefficient.
Some elements of the Industrial Relations Act 1971 — the concept of unfair dismissal and the code of practice—led to a proliferation of industrial relations training in British companies for managers and shop stewards. In those days some of my hon. Friends talked about throwing out the whole Act when they returned to power. I used to say, "Have a care because you may throw out the baby with the proverbial bath water." As the hon. Member for Grantham (Mr. Hogg) said, the concept of unfair dismissal is valuable, not just to trade unionists. Many managers in British industry have suffered at the hands of superiors who have a philosophy and practice of hire and fire.
In my experience of fairly large Scottish companies, the 1971 Act, plus other legislation passed by the Labour Government between 1974 and 1979, led to a growing professionalism among personnel managers and among shop stewards. In the 1970s we saw the development of more humane grievance and discipline procedures in many large companies. I cannot speak about small companies because I have little or no experience of them.
At an industrial relations training course in which I participated as a trainer, the managing director of the biggest company in Edinburgh said to his managers who were assembled for the course, "I do not want this company ever to have to appear in front of an industrial tribunal. This labour legislation will ensure that we become better managers when we deal with that important resource—our work people."
There has been a reference to the informality of industrial tribunals. For many people the prospect of appearing in front of the three wise men, or the three wise women, is daunting. The hon. Member for Banbury (Mr. Baldry) referred to someone not turning up because he was a heroin addict; that must be an exceptional case. I suspect that many people do not turn up at tribunals because they are frightened at the prospect of taking part in what is for them an intimidating procedure.
One aspect that has hardly been touched upon in the debate, is the effect that labour legislation over the past 20 years has had on the role of the personnel manager and on his or her increasing professionalism. It seems that the object of recruitment and selection processes is to obtain the right person for the job. With professional personnel management, we should not need the threat of being able to bag a person.

Mr. Tom Clarke: Does my hon. Friend recall that in his constituency Greenock Morton football club dismissed its assistant manager, Mr. Mike Jackson? His case was upheld when it was heard by a tribunal and it was considered that he was unfairly dismissed, but Mr. Jackson was told that he had to meet all the legal costs. He received not one ha'penny in compensation. I am sure that my hon. Friend will agree that instead of weakening protection for those in employment the Government should be introducing proposals to strengthen the right of those like Mr. Jackson, who was badly and unfairly treated.

Dr. Godman: I am grateful to my hon. Friend for providing the House with that sad illustration. I am a supporter of Greenock Morton but not a director. Incidentally, the club has been overtaken by other sad circumstances in that it has been relegated from the premier league. I am sure that it will be back next season.
The regressive measure before us might take away some of the incentive to continue the process of enhancing the professionalism of industrial relations and personnel management. Surely the object of labour legislation is to ensure that an individual's terms and conditions of employment mean that he is treated fairly and reasonably.
I recognise that there are occasions when a person has to be dismissed if his or her conduct is sufficiently dreadful. However, with efficient recruitment and selection procedures there should be no need to provide harsh sanctions that can be used by less than honest and fair managers in both small and large companies. Over the past 20 years there has been a distinct improvement in labour relations in many companies. That improvement has been brought about to some extent by a more formalised set of grievance and disciplinary procedures. In many of the companies with which I have been associated, the individual can seek redress of grievance right up to board level. Some Scottish industries have tribunals that are formed from within the industries. That is the way ahead for industrial relations and for grievance and disciplinary procedures.
The measure that is before us will harm industrial relations. It will damage the position of skilled workers, including women workers, members of the hierarchy within a company and those in lowly positions. It will threaten the position of many managers. The order goes further than threatening the interests of those on the shop floor or those doing menial work in offices throughout the land. It is lousy legislation and it will encourage lousy managers to behave in a lousy way to their work force. It is a disgrace.

Mr. Michael Foot: Nobody could have listened to this debate without concluding that the whole weight of the argument has been with the Opposition and against the Government's proposals. No attempt has been made by Conservative Members to present an argument in favour of the order, except the hon. Member for Grantham (Mr. Hogg), though I do not believe that he assisted the Government's case. For the Government to introduce in such a way a measure of this character and scale is, as my hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman) has just said, a disgrace. It will injure industrial relations in this country.
The origin of the measures dealing with unfair dismissal was not necessarily the 1971 Act. Unfair dismissal was

included for the first time in that Act, but its origin lies in recommendations contained in the Donovan report. That report recommended that certain industrial disputes could be avoided if proper and fair procedures were established in industry. The Labour Government intended to introduce such a measure before they left office in 1970. Later we repealed all of the odious and offensive provisions of the 1971 Act, but we insisted that the unfair dismissal provisions should be retained and improved. Many Conservative Members also agree that we should persuade employers to support such a measure. That is why the original legislation included a fixed period. We were able to persuade the vast majority of employers to back the legislation and to ensure that it worked.
All that the Government are doing is attempting to carry out the Chancellor of the Exchequer's Budget proposals. He knows nothing about industrial relations. Nobody has ever suggested that he does. Nor has it been suggested that the Department of Employment Ministers want the order. When it was examined in detail, it was found that no case had been made. Therefore, the best thing that the Parliamentary Under-Secretary of State for Employment can do tonight is to say that he will withdraw the order. That is the best service that he can render not merely to industrial relations, but to the Government.
I regret that the Tory wets have not attended this debate. We should greatly have welcomed a contribution from the right hon. Member for Cambridgeshire South-East (Mr. Pym) and from several other Conservative Members who have vowed to introduce compassion and intelligence into this Government. Not one of those right hon. or hon. Members has attended the debate. Therefore, I hope that the Under-Secretary of State will come out in his true colours and say what a miserable order this is, that he proposes to withdraw it, take it to the Prime Minister tomorrow, and dare her to dismiss him for doing a good deed.

Ms. Clare Short: This order is an example of policies based upon slogans and dogma rather than upon serious evidence. We are told that the Centre Forward group has realised that the economic policies of the Government are based upon slogans and dogma. That is clearly right. They have been tested to destruction. They are not working, yet the sloganising and the dogma continue. This order provides yet another example.
The debate has also demonstrated the advantage of trade union-sponsored Members of Parliament. I am proud to declare that I am sponsored by the National Union of Public Employees, while a number of my hon. Friends who have contributed to the debate are also sponsored by trade unions—for example, by the Amalgamated Union of Engineering Workers, the Post Office Engineering Union and the Transport and General Workers' Union.
Conservative Members have suggested that these provisions are of no importance, that they provide no protection for workers and that they make no difference. Workers value them. Workers are unfairly dismissed, and they feel angry when that happens. They want the right to take action against an employer who treats them in such a way. It is not good enough to look at cases like that of the heroin addict. That story does not ring true.

Mr. Holt: I am sure that the hon. Lady does not wish to call me a liar. I shall send her chapter and verse.

Ms. Short: I should not dream of calling the hon. Gentleman a liar. I meant that the case was not typical of cases with which my right hon. and hon. Friends are familiar.
The difficulties that firms face when dealing with an uncontested case have been mentioned. Conservative Members do not understand that we set standards so that most employers most of the time do not go around unfairly dismissing their workers. If there were no provisions and penalties, there would be far more cases of unfair dismissal.
It is not good enough to measure the cost of the contested case and say that it benefits only the individual involved. The protection of the law applies to all workers who are unfairly dismissed, because the provisions exist.
My hon. Friend the Member for St. Helens, North (Mr. Evans) quoted the extraordinary statement made by the Secretary of State for Employment in a press release on 19 March 1985 justifying this proposal shortly after the Budget. He said:
The risk of unjustified involvement with tribunals in unfair dismissal cases and the costs of such involvement are often cited as deterring employers from giving more people jobs. This change․should help reduce the reluctance of employers to take on more people, while still preserving a fair balance between the reasonable interests of employer and employee.
How weak that is. It says, "often cited" and "should help".
It contains no evidence.
Let me consider the evidence, because this is an important matter and a great deal of evidence is available, as my hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding) made clear. Allegations and rumours that the employment protection laws prevent employers taking on workers have been going on for a long time. The Labour Government therefore commissioned a series of academic studies to test them. The first was conducted by the Policy Studies Institute. W. W. Daniel, who has a reputation for high-quality research on this subject, with someone called Stilgoe, whose work I do not know, studied the manufacturing sector— in particular, firms employing between 50 and 50,000 people. Their conclusions were summarised in an article which appeared in the Department of Employment Gazette in June 1978. They had studied all the employment protection legislation. They said:
The aspect of employment protection legislation to have had the most widespread impact upon employers has been unfair dismissal requirements. Their prime effect has been to encourage the reform or formalisation of procedures adopted in taking disciplinary action and in executing dismissals. They have had a secondary influence upon the degree of care exercised by managers in selecting new employees and appraising the performance of existing ones. At the same time our evidence suggests that unfair dismissal measures have reduced the rates of dismissal, particularly in establishments where levels were relatively very high prior to the legislation. There was no general indication in relation to the sectors of industry which we studied that employment protection legislation was inhibiting management from taking on new labour where they otherwise would have done so.
That study was funded by the Department of Employment.
More significantly, the study tells us that when the authors asked managers what the effect of the legislation had been, many said that it improved the quality of their management. I quote from the findings of the study because the arguments are important and should be heeded by Conservative Members and, in particular, by the Minister. Managers
felt that on balance the Employment Protection Act had been advantageous to them. They most commonly referred to the way

it had helped and encouraged them to establish agreed procedures, most frequently with regard to discipine, but also for regulating other terms and conditions of employment. They no longer suffered the consequences of line managers or supervisors taking arbitrary or idiosyncratic decisions. Further benefits attributed to employment legislation included the report that it meant"—
and we must bear in mind that managers are speaking in this passage—
that trade union representatives had less scope to exploit uncertainty and ambiguity.
That refers to less conflict in the workplace.
Employees and their representatives knew where they stood and the labour relations climate had improved in consequence. Greater management attention was devoted to human resources and management was required to be systematic and explicit in its evaluation and use of human resources. Job specification, selection and appraisal of performance had been improved and more regard was paid to seeing that people were properly trained.
I hope that the Minister has noted that. We continually hear speeches and receive press releases in which the Government bemoan the low level of training in this country, yet they disrupt the small amount of machinery that exists to encourage training. The example that we have tonight will encourage employers to adopt bad employment practices, including less training.
The study added:
Personnel considerations were more salient and the influence of the personnel function had increased.
In other words, according to that study, many managers said that the effect of legislation was to improve the quality of their management, to improve industrial relations and to lessen the amount of conflict in the workplace.
It may be said by some Conservative Members that that study applied to quite large firms — of 50-plus employees — in manufacturing, whereas they had referred to the problems of small firms. Another study was commissioned on that subject. The Department of Employment's research paper No. 6, on the impact of employment legislation on small firms, published in July 1979, having asked small firms a series of detailed questions, stated:
What general conclusions can be drawn from these factual findings? The results counter the suggestion that the legislation had some massive and widespread effect on small firms. Only 6 per cent. mentioned employment legislation and 2 per cent. health and safety legislation as among the main problems faced by their firms. Less than 9 per cent. mentioned these issues when asked about Government measures that had caused difficulty. When asked directly if employment legislation had affected them, 65 per cent. said it had not. Only 12 per cent. had found particular pieces of employment legislation troublesome when faced with a specific list. Over 60 per cent. believed that the legislation had not made it more difficult to dismiss staff. When firms were asked to explain their labour market behaviour—that is, why they had not expanded their staff as much as would have been expected"—
the whole thrust of the Government's argument is that treating workers in a worse way will lead to more employment—
only two out of 81 respondents mentioned the Employment Protection Act.
We can proceed to examine the statistics collected by the Department of Employment. An article by Kevin Williams analysing the statistics in considerable detail appeared in the Industrial Law Journal in which he examined the figures for 1972 to 1981. He wrote:
The statistics do not support the popular mythology.
It is the popular mythology, unsupported by the research evidence and unsupported by the statistics, on which the Government are proceeding tonight. They should be


ashamed of themselves. The article went on to comment that since the legislation came into force and statistics were collected
almost a quarter of a million complaints have been disposed of. Less than 1 per cent. of all employment terminations had gone through the procedures and less than 3 per cent. of all dismissals.

Mr. Cash: To bring matters a little more up to date, does the hon. Lady accept that, of the 10,381 cases which went to hearing, 68 per cent. were dismissed, showing that there was no real substance in the cases?

Mr. Prescott: That question was planted.

Ms. Short: It is interesting to note that after the comments of my hon. Friend the Member for Newcastle-under-Lyme about the civil servants in the Box not passing any notes out the hon. Member for Stafford (Mr. Cash) went over there and was presumably given that profound statistic. Certainly the operation of the legislation has deteriorated and there are fewer findings of unfair dismissal, but that is part of our case rather than the hon. Gentleman's case as fewer and fewer firms are inconvenienced by adverse findings.
Since the Government took power in 1979 and adopted the dogmatic and destructive economic policies from which the country is suffering the number of unfair dismissal claims has increased because when jobs cannot be found and losing one's job may mean prolonged unemployment workers are more likely to pursue their claims. The argument that out of sheer malice unreasonable employees complaining too much and causing great trouble to virtuous employers who are employers who are desperately trying to create jobs for all the poor unemployed is utterly false. There are endless procedures to screen out such cases and heavy penalties can be imposed on any worker acting in that way. Moreover, if costs are awarded against the applicant, that in itself is a serious penalty for a person who has no legal aid and has already lost his job.
Two thirds of all complaints are withdrawn or settled at the conciliation stage and never reach the tribunals which cause all the knee-knocking described by the hon. Member for Langbaurgh (Mr. Holt) in his entertaining contribution. The employee may withdraw his claim or the conciliation process through ACAS may arrive at a settlement acceptable to both sides. The remaining cases go on to the tribunal, where the success rate is one in four and declining.
Who takes cases of unfair dismissal to the tribunal? According to Kevin Williams, in his article "Unfair dismissal: myths and statistics", the majority of complaints are made against small firms with fewer than a hundred workers by non-unionised and relatively poorly paid men in low status jobs whose workmates are frequently disinclined to testify against the employer for fear of jeopardising their own position—a point stressed by my hon. and learned Friend the Member for Leicester, West (Mr. Janner).
Low-paid, non-unionised workers in factories with a higher turnover of labour and poor management practices are the people who will be hurt by this tatty piece of legislation. Women are significantly less likely to complain—a phenomenon only partly explained by the fact that many more women than men work part time, generally have shorter service and so are less likely to be protected by the legislation.
Virtually everyone who has contributed to the debate and brought evidence to the House has torn the proposal to shreds and shown how disreputable it is. The one compliment that I can pay to the Minister is to say that I am sure that he does not believe in this measure—if it is honourable to try to convince the House of something in which he does not believe.
The present law has led to better recruitment practices, grievance procedures and training by firms — all improvements in industrial relations which the Government claim to favour. There is clear evidence that since these measures were introduced there have 'been fewer cases of industrial action over dismissals which the workers perceive as unfair. There has been a reduction in industrial action because of injustices in the work place — surely we would all be in favour of that. The evidence shows that the legislation does not prevent small or large firms from employing additional staff.
Conservative Members go on talking about the cost. There is a cheap system of insurance against the possible costs incurred by an employee taking action under this legislation. Paul Lewis tells us in the "International Labour Review" that in 1982 a firm with 10 employees could, for an insurance premium of £120 a year, cover itself for the risks involved in a case that might cost up to £30,000 per employee.
It is not that the present law is perfect. I agree with the hon. Member for Langbaurgh that we do not want great formal procedures involving lawyers and masses of expense. We can argue that the legislation has failed in one of its primary objectives—to return to work people who have been unfairly dismissed. Research evidence clearly shows that people who, immediately after they have been dismissed, would deeply like to have their job back may feel three and a half months later, after both sides have attacked each other, that they no longer want it back because the relationship has broken down. I agree with the hon. Member for Langbaurgh that there is room for more conciliation and informal procedures to return people to their jobs.
The present position is not perfect, but the Government's proposals are disgraceful. Part of their great economic strategy for the 1980s and 1990s is sweatshops, low pay, rotten standards of employment practices, lack of training and poor management. That is what the Government are giving us. That is what the Budget was about. This is just a tatty little part of that tatty little strategy.

Mr. Peter Bottomley: By leave of the House, Mr. Deputy Speaker, may I say that the hon. Member for Birmingham, Ladywood (Ms. Short) concluded—I am sorry that she felt it necessary to continue for so long—by referring to the Budget. I believe that the Budget will have a greater impact on employment than this variation order, because it gives direct help to those employing lower paid people as a result of the restructuring of national insurance. It is important to keep our various debates and proposals in perspective.
No one has claimed that this variation of period order will have a massive impact. It may have a significant psychological impact and a direct impact on some people who have faced trying to get rid of an unsatisfactory employee without believing that they had sufficient evidence to justify dismissal. They may be one of those


two thirds of cases which do not come to a hearing, either because of conciliation or withdrawal, or one of the one third of cases that go to a hearing but the application is not upheld. In all these discussions, I caution the House against building too much on what is before it.

Mr. Prescott: The Government have presented no evidence.

Mr. Bottomley: The hon. Gentleman need not interrupt in the few minutes that his colleague the hon. Member for Ladywood has left me. We are dealing with the provision for employers of more than 20 people dismissing someone between the 12th and the 24th month.
Some hon. Members have openly said that they do not believe that there should be a qualifying period. Others are willing to accept that a qualifying period is reasonable. We have heard from the Opposition that, when changes were made in the 1970s, the qualifying period was not eliminated immediately in order to try to carry employers with the idea. That was at least an acknowledgment that employers do have a view to which it is worth paying attention. It is established that there is an impact which should be considered—whether direct or actual, because of the psychological effect.
I think I can still survive the compliments of the hon. and learned Member for Leicester, West (Mr. Janner); we may have to put up with each other for some time yet. He referred to the length of my speech and whether I was reading it too fast or too slowly. I was not too clear—[Interruption.] The hon. Member for Kingston upon Hull, East (Mr. Prescott) now says that it does not matter.
At the beginning I was explaining the nature of the provision and the reason for it. I should now like to try to get the House to understand that we are not just talking about employees who are unfairly dismissed. We are talking about employees who are able to put in an application claiming to unfair dismissal and go to an industrial tribunal.
The House will not hear from me tonight a total justification which lines up the Government only behind those employers who feel that they have been unjustly treated by having to answer unfair dismissal complaints. Neither would the House expect me to be concerned only with those employees who presently may have been unfairly dismissed but do not have the possibility of an effective claim for unfair dismissal because they fall within the qualifying period. We want to try to find the right balance. That is what my right hon. Friend said in his press release.
However much scorn Labour Members pour on what the Government are trying to do, they should accept that we are trying to improve the prospects for employment. That is critically important. Although there may be differences of view as to the scale of a change of this kind, the fact that there is likely to be an impact leading to greater employment is not disputed by any of the evidence read out by the hon. Member for Ladywood.
If we were to turn the question the other way round and go through the period when the right hon. Member for Blaenau Gwent (Mr. Foot) was involved in these affairs, he might be able to demonstrate, through research, that there was no impact whatever on employment as a result of a specific change in the qualifying period. But I do not

believe that that evidence is there. If one follows the line of Karl Popper, one should not be asking for evidence on something that one cannot actually demonstrate.
I accept the point made by the hon. Member for Greenock and Port Glasgow (Dr. Godman) about the improvements in industrial relations and in training on the management side, also involving shop stewards, together with the fact, mentioned by the hon. Member for St. Helens, North (Mr. Evans) and by other hon. Members, that the number of claims for unfair dismissal is a small fraction of the number of people who lose their jobs. That shows that there is a sense of reality in the outside world, even though we in this House may occasionally lose it when debating issues of this kind. If people were listening to this debate and believing all they heard from the Opposition Benches, one might expect a good many employers to start dismissing people unfairly and wantonly and on a large and growing scale. [Interruption.] If the hon. Member for Ladywood thinks that that is what I want, she is flying in the face of some of the compliments that I am surviving from her hon. and learned Friend the Member for Leicester, West.
What the Government are trying to do—I believe rightly—is to recognise the changed circumstances of today, where we have a far greater need to get people into work. Some people in work may need to accept for that one period, between 12 months and 24 months, the reduced provision in regard to making a claim for unfair dismissal. That is the essence of the debate.

Mr. Janner: The Minister has said that there is a reduced provision. Is it not the fact that the Government are removing that provision altogether for that 12-month period?

Mr. Bottomley: As the hon. and learned Gentleman pointed out, people can still make the claim, and the industrial tribunal hearing might have to be put down, although a pre-hearing assessment might remove it. But there are cases which have been brought to my attention of cases involving people who clearly have not qualified through the qualifying period, where an employer has been summoned to attend an industrial tribunal hearing. If the hon. and learned Gentleman is saying that that is wrong, I should be interested to hear from him, but it is the fact. [Interruption.] The hon. Member for Ladywood says that it is mad. When she reads Hansard I hope she will accept that that sort of experience can discourage an employer from replacing or taking on additional staff. I think that the hon. Lady's research confirms what is said in the document "Burdens on Business"—

Mr. Ron Leighton: Why does the Minister defend this mean and despicable measure? Does he not agree that 12 months is sufficient for any employer to assess the capabilities of any employee?

Mr. Bottomley: I am sure that we all welcome the Chairman of the Select Committee to the Chamber. If someone is taken on for a probationary period, and assessment comes within the first year, if that person is near the mark of being an acceptable employee but not quite there, giving him an additional year to demonstrate his capability may keep him in work. That is a simple and direct answer to the hon. Gentleman's question.
There have been comments about the way in which industrial tribunals conduct their affairs, but that is outside


the terms of the debate. However, I am grateful to my hon. Friend the Member for Langbaurgh (Mr. Holt) for putting forward his points in a robust and good-natured way. The fact that he managed to keep Opposition Members unaware of his view on the order, as well as keeping me on tenterhooks, is a tribute to his debating skills. We look forward to debates on the issues that he raised—such as the question whether so many lawyers need to be involved. We may discover that some recent books on industrial tribunal procedure bear some consideration in deciding whether the current system is the most effective. We might also pick up the point about ensuring that some of the tribunal awards are paid and that people do not escape by going bankrupt because awards have been made against them.
The hon. Member for St. Helens, North tried to interrupt my opening speech. I am not sure whether that was because I was not saying what he expected, so he had to rewrite his speech, or whether he was trying to play for time because the Opposition had asked for an additional hour and a half. All the time available has been used by hon. Members, so it is right that my introduction was factual. I commend the order to the House because the balance will be more in favour of encouraging employers to take on more people, without feeling that they may have to face unfair claims for unfair dismissal up to two years after the employee joined the company.
I look forward to a continuation of improvement in industrial relations. I remind the House that the information from many experts is that those businesses that have effective grievance procedures and ensure that they carry them out to the letter will not be at risk from the unfair dismissal provisions in employment legislation.

Mr. Janner: The Minister is wrong.

Mr. Bottomley: If the hon. and learned Gentleman says that I am wrong, perhaps we should have another debate in a few minutes. The fact is that we expect the number of cases to reduce by 4,000 a year, and I believe that future research will show some increase in employment—

It being three hours after the commencement of proceedings on the motion, Mr. Deputy Speaker put the Question pursuant to Standing Order No. 3 (Exempted business) and order [10 May]:

The House divided: Ayes 221, Noes 138.

Division No. 211]
[1.28 am


AYES


Adley, Robert
Bottomley, Peter


Aitken, Jonathan
Bottomley, Mrs Virginia


Alexander, Richard
Bowden, A. (Brighton K'to'n)


Amess, David
Bowden, Gerald (Dulwich)


Ancram, Michael
Boyson, Dr Rhodes


Arnold, Tom
Braine, Rt Hon Sir Bernard


Ashby, David
Brandon-Bravo, Martin


Atkins, Robert (South Ribble)
Brinton, Tim


Baker, Nicholas (N Dorset)
Brown, M. (Brigg &amp; Cl'thpes)


Baldry, Tony
Browne, John


Banks, Robert (Harrogate)
Bruinvels, Peter


Batiste, Spencer
Buck, Sir Antony


Bellingham, Henry
Budgen, Nick


Bendall, Vivian
Bulmer, Esmond


Benyon, William
Burt, Alistair


Best, Keith
Butcher, John


Bevan, David Gilroy
Butterfill, John


Biffen, Rt Hon John
Carlisle, Kenneth (Lincoln)


Blackburn, John
Carlisle, Rt Hon M. (W'ton S)


Blaker, Rt Hon Sir Peter
Carttiss, Michael


Boscawen, Hon Robert
Cash, William



Chapman, Sydney
Knowles, Michael


Chope, Christopher
Knox, David


Clark, Dr Michael (Rochford)
Lamont, Norman


Clarke, Rt Hon K. (Rushcliffe)
Lang, Ian


Clegg, Sir Walter
Latham, Michael


Cockeram, Eric
Lawler, Geoffrey


Colvin, Michael
Lawrence, Ivan


Coombs, Simon
Lee, John (Pendle)


Cope, John
Leigh, Edward (Gainsbor'gh)


Couchman, James
Lennox-Boyd, Hon Mark


Cranborne, Viscount
Lester, Jim


Crouch, David
Lewis, Sir Kenneth (Stamf'd)


Currie, Mrs Edwina
Lightbown, David


Dicks, Terry
Lilley, Peter


Dorrell, Stephen
Lloyd, Peter, (Fareham)


Douglas-Hamilton, Lord J.
Lord, Michael


Dover, Den
Lyell, Nicholas


Dunn, Robert
McCrindle, Robert


Durant, Tony
McCurley, Mrs Anna


Edwards, Rt Hon N. (P'broke)
MacKay, Andrew (Berkshire)


Eggar, Tim
MacKay, John (Argyll &amp; Bute)


Evennett, David
Maclean, David John


Fairbairn, Nicholas
McNair-Wilson, P. (New F'st)


Fallon, Michael
McQuarrie, Albert


Farr, Sir John
Madel, David


Favell, Anthony
Major, John


Fenner, Mrs Peggy
Malone, Gerald


Finsberg, Sir Geoffrey
Maples, John


Fookes, Miss Janet
Marland, Paul


Forman, Nigel
Marlow, Antony


Forsyth, Michael (Stirling)
Marshall, Michael (Arundel)


Forth, Eric
Mather, Carol


Fox, Marcus
Maude, Hon Francis


Franks, Cecil
Mawhinney, Dr Brian


Fraser, Peter (Angus East)
Maxwell-Hyslop, Robin


Freeman, Roger
Mayhew, Sir Patrick


Fry, Peter
Mellor, David


Gale, Roger
Merchant, Piers


Galley, Roy
Meyer, Sir Anthony


Gardiner, George (Reigate)
Miller, Hal (B'grove)


Goodhart, Sir Philip
Mills, Iain (Meriden)


Greenway, Harry
Mills, Sir Peter (West Devon)


Gregory, Conal
Miscampbell, Normar


Griffiths, Peter (Portsm'th N)
Mitchell, David (NW Hants)


Ground, Patrick
Moate, Roger


Hamilton, Hon A. (Epsom)
Montgomery, Sir Fergus


Hamilton, Neil (Tatton)
Morris, M. (N'hampton, S)


Hampson, Dr Keith
Morrison, Hon C. (Devizes)


Hanley, Jeremy
Moynihan, Hon C.


Hannam, John
Neale, Gerrard


Hargreaves, Kenneth
Needham, Richard


Harris, David
Nelson, Anthony


Haselhurst, Alan
Newton, Tony


Havers, Rt Hon Sir Michael
Nicholls, Patrick


Hawkins, Sir Paul (SW N'folk)
Normanton, Tom


Hawksley, Warren
Norris, Steven


Hayes, J.
Oppenheim, Phillip


Hayward, Robert
Osborn, Sir John


Heathcoat-Amory, David
Ottaway, Richard


Heddle, John
Page, Richard (Herts SW)


Henderson, Barry
Parkinson, Rt Hon Cecil


Higgins, Rt Hon Terence L.
Parris, Matthew


Hind, Kenneth
Patten, Christopher (Bath)


Hogg, Hon Douglas (Gr'th'm)
Pattie, Geoffrey


Holland, Sir Philip (Gedling)
Pawsey, James


Holt, Richard
Percival, Rt Hon Sir Ian


Howarth, Alan (Stratf'd-on-A)
Pollock, Alexander


Howarth, Gerald (Cannock)
Portillo, Michael


Hunt, David (Wirral)
Powell, William (Corby)


Hunt, John (Ravensbourne)
Powley, John


Hunter, Andrew
Price, Sir David


Jackson, Robert
Proctor, K. Harvey


Johnson Smith, Sir Geoffrey
Raffan, Keith


Jones, Gwilym (Cardiff N)
Rathbone, Tim


Jones, Robert (W Herts)
Rhys Williams, Sir Brandon


Kellett-Bowman, Mrs Elaine
Robinson, Mark (N'port W)


King, Roger (B'ham N'field)
Rossi, Sir Hugh


King, Rt Hon Tom
Rowe, Andrew


Knight, Gregory (Derby N)
Ryder, Richard


Knight, Mrs Jill (Edgbaston)
Sackville, Hon Thomas






Sainsbury, Hon Timothy
Viggers, Peter


Smith, Sir Dudley (Warwick)
Walden, George


Speed, Keith
Walker, Bill (T'side N)


Stanbrook, Ivor
Wall, Sir Patrick


Stevens, Martin (Fulham)
Wardle, C. (Bexhill)


Stokes, John
Wilkinson, John


Taylor, John (Solihull)
Yeo, Tim


Tebbit, Rt Hon Norman



Thompson, Donald (Calder V)
Tellers for the Ayes:


Thompson, Patrick (N'ich N)
Mr. Tristan Garel-Jones and


Thurnham, Peter
Mr. Michael Neubert.


Townsend, Cyril D. (B'heath)





Archer, Rt Hon Peter
Cunliffe, Lawrence


Ashdown, Paddy
Dalyell, Tarn


Ashton, Joe
Deakins, Eric


Atkinson, N. (Tottenham)
Dewar, Donald


Bagier, Gordon A. T.
Dixon, Donald


Banks, Tony (Newham NW)
Dobson, Frank


Barnett, Guy
Dormand, Jack


Beckett, Mrs Margaret
Dubs, Alfred


Bell, Stuart
Dunwoody, Hon Mrs G.


Benn, Tony
Eadie, Alex


Bermingham, Gerald
Eastham, Ken


Bidwell, Sydney
Evans, John (St. Helens N)


Boyes, Roland
Ewing, Harry


Bray, Dr Jeremy
Fatchett, Derek


Brown, Gordon (D'f'mline E)
Fisher, Mark


Brown, Hugh D. (Provan)
Foot, Rt Hon Michael


Brown, N. (N'c'tle-u-Tyne E)
Forrester, John


Brown, R. (N'c'tle-u-Tyne N)
Fraser, J. (Norwood)


Campbell-Savours, Dale
Freeson, Rt Hon Reginald


Canavan, Dennis
George, Bruce


Clark, Dr David (S Shields)
Godman, Dr Norman


Clarke, Thomas
Golding, John


Clwyd, Mrs Ann
Hamilton, James (M'well N)


Cocks, Rt Hon M. (Bristol S.)
Hamilton, W. W. (Central Fife)


Cohen, Harry
Hardy, Peter


Concannon, Rt Hon J. D.
Harrison, Rt Hon Walter


Cook, Frank (Stockton North)
Holland, Stuart (Vauxhall)


Cook, Robin F. (Livingston)
Home Robertson, John


Corbyn, Jeremy
Hughes, Robert (Aberdeen N)


Cowans, Harry
Hughes, Roy (Newport East)


Craigen, J. M.
Hughes, Sean (Knowsley S)


Crowther, Stan
Janner, Hon Greville



John, Brynmor
Penhahgon, David


Kaufman, Rt Hon Gerald
Pike, Peter


Kennedy, Charles
Powell, Raymond (Ogmore)


Kilroy-Silk, Robert
Prescott, John


Kirkwood, Archy
Radice, Giles


Lamond, James
Randall, Stuart


Leadbitter, Ted
Redmond, M.


Leighton, Ronald
Rees, Rt Hon M. (Leeds S)


Lewis, Ron (Carlisle)
Richardson, Ms Jo


Lewis, Terence (Worsley)
Roberts, Ernest (Hackney N)


Litherland, Robert
Robertson, George


Lloyd, Tony (Stretford)
Robinson, G. (Coventry NW)


Loyden, Edward
Rooker, J. W.


McCartney, Hugh
Rowlands, Ted


McDonald, Dr Oonagh
Sedgemore, Brian


McKay, Allen (Penistone)
Sheerman, Barry


McKelvey, William
Short, Ms Clare (Ladywood)


MacKenzie, Rt Hon Gregor
Silkin, Rt Hon J.


McNamara, Kevin
Skinner, Dennis


McTaggart, Robert
Smith, C.(Isl"ton S &amp; F'bury)


McWilliam, John
Soley, Clive


Madden, Max
Spearing, Nigel


Marek, Dr John
Strang, Gavin


Marshall, David (Shettleston)
Thomas, Dr R. (Carmarthen)


Martin, Michael
Thompson, J. (Wansbeck)


Maxton, John
Thorne, Stan (Preston)


Maynard, Miss Joan
Tinn, James


Meacher, Michael
Wallace, James


Meadowcroft, Michael
Wardell, Gareth (Gower)


Mikardo, Ian
Weetch, Ken


Millan, Rt Hon Bruce
Welsh, Michael


Miller, Dr M. S. (E Kilbride)
Williams, Rt Hon A.


Nellist, David
Winnick, David


Oakes, Rt Hon Gordon
Wrigglesworth, Ian


O'Neill, Martin
Young, David (Bolton SE)


Park, George



Parry, Robert
Tellers for the Noes:


Patchett, Terry
Mr. Frank Haynes and


Pavitt, Laurie
Mr. Robin Corbett.

Question accordingly agreed to.

Resolved,

That the draft Unfair Dismissal (Variation of Qualifying Period) Order 1985, which was laid before this House on 17th April, be approved.

Thorpe Hospital

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Lennox-Boyd.]

Mr. Jack Dormand: I make a plea for the retention of maternity services at Thorpe hospital knowing that there is an overwhelming case for it. Not least is the fact that the hospital enjoys the full confidence of the people of the area. That confidence is based on several factors that I shall develop, but I mention it first because we are often told by the Government that elected or appointed bodies must listen to the voice of the people. In the case of Thorpe, it appears that the responsible bodies are completely ignoring that voice.
In all my 15 years as the hon. Member for Easington, I have never known such concern and enthusiasm about a local issue. In letters, at meetings and on the streets I am constantly asked, "What on earth are they doing, talking about closing our hospital?" The action committee set up to campaign against the closure and with which I work closely, is a dedicated and knowledgeable group of local people who are doing magnificent work in defending the hospital. They are receiving the wholehearted support of the community.
The official documents relating to the hospital talk about it being "isolated". I never cease to wonder about the people who write such reports. The hospital could not be more central for the area that it serves. Many of the expectant mothers walk to it. Buses pass it. No car journey to it is longer than 10 minutes. I live half a mile from it, so I need no instruction from anyone about its location in relation to the people who use it.
It is proposed that the maternity services be transferred to Sunderland and Hartlepool. Those towns are 10 miles away from most of the population, and the bus services to them are not very convenient. Indeed, some are highly inconvenient. I need hardly add that there would be considerable extra expense in getting to both those towns and, of course, we are talking not just about expectant mothers, but about families and friends visiting them. Those distances and the inconvenience would also inevitably be a deterrent to attendance at ante-natal clinics. Surely that is of considerable importance, too.
Some of my constituents argue that the greater distances constitute an element of danger. That point cannot be denied. I hope that the Minister will agree with that. It may not be a major point to most people, but if there were to be any tragic happenings because pregnant women did not arrive at the hospital on time, it would be a major treagedy for the people concerned.

The Parliamentary Under-Secretary, the hon. Member for Oxford, West and Abingdon (Mr. Patten): , referred to geographic factors when replying to a debate raised by his hon. Friend the Member for Harborough (Sir J. Fan) in March this year, and drew support from the view shown by the Maternity Services Advisory Committee. Saying that the Government's view, by and large, is that women should be encouraged to have their babies in the larger and properly staffed consultant units of district general hospitals, the Minister went on to say
However, the committee recognised that in some localities geographic factors will require the availability of what is termed 'isolated' maternity units, and recommended that such units, where geographic factors were a powerful influence on the

provision of health care, should be equipped to a standard to cope with any of the complications that might have to be dealt with on site."—[Official Report, 9 January 1985; Vol. 70, c. 881.]
If the Minister and the Department believe that Thorpe hospital, for the reasons that I am now giving, epitomises the circumstances envisaged in that report.
I refer to the hospital itself. In my opening remarks I said that it enjoyed the full confidence of the people of the district. There are several reasons for that. One is the high standard of care and the happy family atmosphere that is a feature of it.
Anyone who visits the hospital cannot help being struck by that atmosphere. It arises from the dedication and the deep care continually displayed by the staff. Everything possible is done by them to provide the security that is so important at such times.
There was an interesting incident when I last visited the hospital. I spoke to a constituent who had just been delivered of her baby and asked if everything was satisfactory. She replied, "This is my seventh baby born here. I would not have been here if I did not think that everything would be all right." No words of mine can be more eloquent or convincing than those in seeking to justify the continuance of Thorpe hospital.
There is universal praise for the hospital. The campaign to retain it has now lasted for well over a year, and it is literally true to say that no person or organisation has spoken out in support of closure, in spite of claims by the health authorities and the consultants that the alternative proposals will provide a better service.
One of the most heartening and surprising letters of support came from the clergymen of the area. I wonder whether the Minister has ever received a letter from the clergymen of his area. This is an unusual step for them to take, and is a measure of the strength of feeling in the district. Perhaps more importantly, the doctors of the area support the retention of the hospital and are completely opposed to its closure.
The area served by the hospital is covered by parts of three health authorities. It must surely be of some significance that none of the three community health councils supports the proposed closure. When the Minister replies, will he say how much importance the Government place on the views of community health councils which. after all, are the patients' watchdogs?
There is a widespread view in my constituency that the closure is being pressed for the convenience of the consultants, who must travel to the hospital. No one appreciates more than I the splendid work done by the consultants over the years, but, having regard to the strength of the case for retaining maternity services at Thorpe, there may well be some substance in that view. I hope that the Minister will take due note of that point. At a meeting with the consultants which I organised some months ago, I told them of that view.
One consultant said that he would welcome an extension at his hospital, but went on to say:
If Thorpe is to close it would be jolly hard luck on the residents of the area".
That is an astonishing statement for a consultant to make. The quotation is taken from a local newspaper. It received widespread publicity, so I assume that it was a correct report of what he said.
Thorpe hospital has about 1,000 births a year. On 13 June last year, in a written answer to my question, the Minister listed the maternity hospitals and maternity wings


which had been closed from 1979 to 1983, together with the average number of deliveries in each of them for the previous three years. Of the 46 hospitals named, only eight had more births than Thorpe, and from their location I suspect that the circumstances in most were very different from those in my own area. I can understand closures where the number of births were as few as 20, 47, 46, 73, 69, 98 or even more—I have quoted those figures from the Minister's answer — but those figures are very different from 1,000.
The Thorpe work load, if I can so describe it, allied to all the other factors I have mentioned, make the position very different from the closures mentioned in the written answer to me. The argument is that expectant mothers will be given a better and safer service at Sunderland and Hartlepool, and I expect the Minister to make that the main thrust of his reply. It will be necessary, however, to spend a considerable sum of money to bring the other two hospitals up to the required standard. The total capital and revenue costs at Sunderland will be £1,232,039 and at Hartlepool £498,250. Those are the official figures. If it is felt that there is a problem at Thorpe—and I do not accept that there is — a simple solution would be to spend the total of those two sums, £1,730,289, on Thorpe hospital. I assure the Minister that I am not being naive in suggesting that. In considering whether any hospital should close, it is essential to take all the factors into consideration, and I have described the merits of this hospital.
Had there been a high mortality rate at Thorpe, I would have been among the first to urge its closure. I understand that the mortality rate at Thorpe is 2·5 per 1,000 births. That cannot be regarded as a dangerous figure. I think I am correct in saying that it is below the average. I was informed yesterday that one of the most difficult births, a twin caesarean, was carried out recently without any problems. That is a tribute to both staff and facilities and is yet further evidence of the strength of the case for the retention of the hospital.
If there is any inadequacy or danger in regard to the medical aspects, we have yet to see the evidence of it. The confidence of expectant mothers in Thorpe and the difficulties associated with travelling to Sunderland or Hartlepool are giving rise to the very disturbing view, which has been expressed to me on several occasions, that expectant mothers will choose to have their babies at home. That would probably happen in some cases. I am sure the Government would deprecate such a development. I hope that the Minister will consider the seriousness of such a possibility.
When there is controversy about a proposal to close a hospital, the decision has to be taken by the Minister. I assure him that there is the utmost controversy in this case. I hope that he will listen to those who oppose the closure. By any objective standard, the case for retention could not be stronger. I would welcome the opportunity at an appropriate time to talk to the Minister in greater detail than is possible in a debate of this kind. I do not wish to praise a Tory Minister too much, but I have always found the Minister to be fair, if somewhat robust on occasion, and certainly open-minded. I know that he will give full consideration to the case that I have made tonight.

The Minister for Health (Mr. Kenneth Clarke): I congratulate the hon. Member for Easington (Mr. Dormand) on his success in obtaining an Adjournment debate and on the way in which he has put the case for his constituents in raising the controversial proposal to close a hospital which serves his constituency. I listened with great interest to all that he said. Certainly if he would like to come to see me at a more formal meeting and expand his arguments, I shall await that with interest. I shall arrange such a meeting and suspend judgment on the matter until I have heard his full arguments.
The hon. Gentleman has made it clear that his principal concern is about the maternity services for his constituency. He is extremely assiduous in pursuing his constituency interests in matters of this kind. No doubt he shares the objective of everybody in the Health Service of making sure that in his constituency, as elsewhere, child birth is made both safe and a very rewarding time for mothers and mothers-to-be. Every health authority strives to ensure that, but every authority must at all times ensure that the care that it is providing at any given time is in line with the best modern practice. It has to review its maternity services to ensure that it is keeping up with the best and most up-to-date standards.
The proposal that the hon. Gentleman has raised is still subject to consultation. At this stage I am not sure that it will come to me for my decision. In many ways I prefer these matters to be determined locally.
I hope that the hon. Gentleman will forgive me if I begin by making some general remarks. Decisions must be based on the best kind of maternity care for a locality. The general issues between the wishes of the consultants and the obstetricians and the local population and mothers-to-be are frequently raised when proposals are made that involve small maternity hospitals. Anyone with any responsibility must ensure that, above all, the position of mothers-to-be and their babies is protected. Their safety and health must be ensured to the greatest possible degree.
There have been many inquiries into perinatal and neonatal mortality in recent years. It was the subject of a major inquiry that was undertaken first by the Expenditure Committee and subsequently continued by the Social Services Committee between 1978 and 1980. The Committee's report and the Government's reply were both published in 1980. They were the subject of a debate on 5 December 1980, when the Committee's Chairman, the hon. Member for Wolverhampton, North-East (Mrs. Short), highlighted the different questions that the Committee had attempted to resolve.
The Committee considered at length all the matters which might be linked with Britain's comparatively high natal mortality rates. It considered especially the importance of places of birth and the facilities available. After taking extensive evidence, both professional and from consumer groups, it came to the view that
an increasing number of mothers should be delivered in large units; that selection of patients should be improved for smaller consultant units and isolated general practitioner units; that home delivery should be phased out further.
That is to be found in the second report of the Social Services Committee 1979–80.
We set up the Maternity Services Advisory Committee, to which the hon. Gentleman referred. Its second report on care during child birth was published in January 1984. The committee came to basically the same view as the Social


Services Committee, that by and large an increasing number of mothers should be delivered in large units. The committee recognised that in some localities geographical factors required the availability of so-called isolated maternity units. It recommended that these should be equipped to a standard to deal with the complications that may have to be dealt with on site. As a Government, we commended the reports of the advisory committee and distributed them widely within the NHS and to the appropriate professional and lay organisations.
In July 1984, the Select Committee on Social Services published its follow-up report and recommended that the
DHSS should do more to encourage regions, in the light of the evidence available to them, to rationalise their maternity services in order to promote better standards of care as well as economy".
In our reply to that in October 1984, the Government agreed that it was important for health authorities to look for rationalisation to improve maternity services and to redirect resources. A number of factors need to be taken into account when authorities consider doing this, including first, and most important of all, the view of users of the service, followed by the use made of different units, the need for units at particular locations because of social or geographical factors, the safety record of each maternity unit and the availability of medical cover and ambulance services for the transfer of emergencies.
There is no absolute prescription for all localities. It is not possible to lay down rules which all authorities should follow when reaching a decision either to concentrate maternity services on major sites or to retain the popular smaller, local units.
I mention these facts to demonstrate that local authorities have been encouraged to rationalise their services and to consider locating them in larger hospitals where all the emergency services are readily to hand not only by the Government but by the Select Committee on Social Services and by every advisory committee that has looked at maternity services.
Although there are no absolute rules, it is not surprising that authorities all over the country are looking at their services and trying, I hope, to strike a balance. They have to pursue the objective of reducing the perinatal mortality and handicap figures and improving the safety of the service that they provide. All considerations of that kind must lead them to consider the possibility of concentrating their maternity services on those sites where emergency facilities are most readily to hand. I hope that in doing so they will try to strike a balance, because authorities must keep constantly in the back of their minds how far the concentration of staff and resources in large hospital units matches the needs and wishes of the mothers who use those services.
In recent years emphasis has been placed upon improving the safety of maternity services. The effect has been dramatic. There has been a fall in perinatal mortality rates from 15·4 per cent. deaths per 1,000 births in 1978 to 10·3 per cent. in 1983. That is the result of the efforts of all the staff involved in maternity care in the National Health Service.
While great emphasis must be placed on safety, we must also remember the importance of providing a service that is satisfactory to the mothers. Therefore, I welcome the growing awareness among National Health Service professionals that, while the new technology and better clinical procedures which have led to safer maternity

services must continue to be improved, they must not abandon the traditional, natural birth and all the basic human values that are implicit in childbirth. I believe that it is possible to develop the new general hospital units in such a way that they remain just as friendly and sympathetic places for mothers-to-be as the smaller units which, as we know, enjoy a great deal of local support.
I turn from those generalities to the specific proposal to change the use of Thorpe hospital. As the hon. Member for Easington knows, Thorpe hospital is about l 1 miles from Sunderland, just south of Easington. It draws its patients from an area covered by the Sunderland, Hartlepool and Durham health authorities and provides 49 beds on its three wards. In addition, eight clinics are held at the hospital each week. But the distance of the hospital from the main maternity unit at Sunderland general hospital causes difficulties. The consultant obstetricians working at Thorpe have their duties split between two units. I am sure that the hon. Gentleman appreciates that the difficulties which are caused are not just those relating to convenience for consultants but those connected with the best and most efficient use of their time, the ability to cater for the needs of all their patients and the need to be readily available at all times.
The hon. Gentleman does not agree that Thorpe hospital is isolated, but it is relatively distant from the remainder of the Health Service facilities and that presents a problem with the availability of anaesthetist cover. It means, for example, that epidural anaesthesia cannot be given. It also makes it difficult to provide proper paediatric back-up services.
As I understand it, most babies requiring special care facilities are transferred from Thorpe hospital to Sunderland general hospital. It is only there that such facilities can be provided. Those are the reasons that have caused the Sunderland health authority to propose the centralisation of its maternity inpatient services at Sunderland district general hospital. At the same time, Hartlepool district health authority proposes to extend its maternity inpatient facilities at Cameron hospital.
At Sunderland, by upgrading vacant wards at the district general hospital, the health authority aims to provide more obstetric beds on that site and at the same time to upgrade its delivery rooms. The plans would provide the inpatient facilities currently at Thorpe hospital in much improved accommodation, with experienced staff available full-time. Full anaesthetic and paediatric backup services would be on hand for all deliveries, together with the supporting pathology and radiology services, which are not available at Thorpe. For its part, Hartlepool health authority plans to accommodate patients from its area by making minor adaptions and improvements at Cameron hospital.
I accept that one reasonable reaction of people living in Easington is that travelling to hospitals in Sunderland and Hartlepool is inconvenient. I have no doubt that they will balance that inconvenience against the proposal that patients will receive better care, that fully trained, experienced staff will be continually on hand and that a fully equipped unit will be available.
As the hon. Member will know, it is intended that the outpatient clinics would continue to be provided in the Peterlee-Easington area. For most people attending these clinics there will be no change, as they would continue to be held at Thorpe. However, one gynaecological clinic would be transferred to Ryhope general hospital and the


frequency of sessions held locally at Peterlee health centre increased from fortnightly to weekly. Discussions are taking place among the three health authorities on the future of services. The most important point is that they are consulting about their proposals. I must see what the public reaction to the consultation is. I have to see what the community health councils say about the proposals. I attach importance to their reactions. If they disagree, the proposals will come to me for a decision.
I assure the hon. Gentleman that I shall consider the proposals entirely on their merits. I shall agree to any

contentious closure proposals only if I am satisfied that on balance the interests of the service and the patients are enhanced. I take on board his reaction. He has already reacted adversely. He plainly has his constituents' interests at heart. When I meet him next, whether he comes on his own or with a deputation, I shall listen with great care to his reservations. If the proposal comes to me as contentious I shall weigh up the matter carefully before any final approval is given.

Question put and agreed to.

Adjourned accordingly at eight minutes past Two o'clock.